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As filed with the Securities and Exchange Commission on November 9, 1994
Registration Statement No. 33--
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORMS(*) S-3, S-1 AND F-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Chevron Corporation
(Exact name of Registrant as specified in its charter)
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Delaware 94-0890210
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
225 Bush Street, M.J. McAuley
San Francisco, California 94104 225 Bush Street
(415) 894-7700 San Francisco, California 94104
(Address, including zip code, and (415) 894-7700
telephone number, including area (Name, address, including zip code,
code, or Registrant's principal and telephone number, including area
executive offices) code, of agent for service
Chevron Transport Corporation
(Exact name of Registrant as specified in its charter)
(Translation of Registrant's name into English)
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Republic of Liberia 94-2280244
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
Chevron House M.J. McAuley
11 Church Street 225 Bush Street
Hamilton, Bermuda HM11 San Francisco, California 94104
(809) 295-1774 (415) 894-7700
(Address and telephone number of (Name, address, including zip code,
Registrant's principal executive and telephone number, including
offices) area code, of agent for service)
See Table of Additional Registrants
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Copies to:
Blair W. White, Esq. Charles A. Dietzgen, Esq. James D. Phyfe, Esq.
Pillsbury Madison & Sutro Thacher Proffitt & Wood Davis Polk & Wardwell
P.O. Box 7880 2 World Trade Center 450 Lexington Avenue
San Francisco, California New York, N.Y. 10048 New York, N.Y. 10017
94102 (212) 912-7443 (212) 450-4598
(415) 983-1000
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Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box: ( )
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box: ( )
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CALCULATION OF REGISTRATION FEE
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Serial Indenture
Dated as of (DATE), 1994
AMONG
CALIFORNIA PETROLEUM TRANSPORT CORPORATION,
CHEMICAL TRUST COMPANY OF CALIFORNIA,
as Indenture Trustee,
AND
CHEVRON CORPORATION
__________
$168,500,000
Serial First Preferred Mortgage Notes
Maturing Serially from 1995 to 2005
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TABLE OF CONTENTS
__________
Page
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PARTIES . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
DEFINITIONS.
SECTION 1.1 Certain Terms Defined...................... 2
ARTICLE TWO
ISSUE, EXECUTION, FORM AND
REGISTRATION OF SERIAL MORTGAGE NOTES.
SECTION 2.1. Authentication and Delivery of
Serial Mortgage Notes . . . . . . . . . . 10
SECTION 2.2. Execution of Serial Mortgage Notes. . . . . 11
SECTION 2.3. Certificate of Authentication . . . . . . . 12
SECTION 2.4. Form, Denomination and Date of Serial
Mortgage Notes; Payments of Interest. . . 12
SECTION 2.5. Registration, Transfer and Exchange . . . . 13
SECTION 2.6. Mutilated, Defaced, Destroyed, Lost and
Stolen Serial Mortgage Notes. . . . . . . 15
SECTION 2.7. Cancellation of Serial Mortgage Notes;
Destruction Thereof . . . . . . . . . . . 16
SECTION 2.8. Temporary Serial Mortgage Notes . . . . . . 16
SECTION 2.9. Serial Mortgage Notes Issuable in Global
Form; Depository . . . . . . . . . . . . 17
ARTICLE THREE
COVENANTS
SECTION 3.1. Payment of Principal and Interest . . . . . 19
SECTION 3.2. Offices for Payments, etc.. . . . . . . . . 20
SECTION 3.3. Appointment to Fill a Vacancy in Office of
Indenture Trustee . . . . . . . . . . . . 20
SECTION 3.4. Paying Agents . . . . . . . . . . . . . . . 20
SECTION 3.5. Reports by California Petroleum . . . . . . 21
SECTION 3.6. Reports by the Indenture Trustee. . . . . . 22
SECTION 3.7. Serial Noteholders' Lists . . . . . . . . . 22
SECTION 3.8. Negative Covenants. . . . . . . . . . . . . 22
SECTION 3.9. Reports by Chevron. . . . . . . . . . . . . 23
ARTICLE FOUR
REMEDIES OF THE INDENTURE TRUSTEE AND
SERIAL NOTEHOLDERS ON INDENTURE EVENT OF DEFAULT.
SECTION 4.1. Indenture Event of Default Defined;
Acceleration of Maturity;
Waiver of Default . . . . . . . . . . . . 25
SECTION 4.2. Collection of Indebtedness by
Indenture Trustee; Indenture Trustee May
Prove Debt. . . . . . . . . . . . . . . . 28
SECTION 4.3. Application of Proceeds . . . . . . . . . . 30
SECTION 4.4. Suits for Enforcement . . . . . . . . . . . 32
SECTION 4.5. Restoration of Rights on Abandonment of
Proceedings . . . . . . . . . . . . . . . 32
SECTION 4.6. Limitations on Suits by Serial Noteholders. 32
SECTION 4.7. Powers and Remedies Cumulative; Delay or
Omission Not Waiver of Default. . . . . . 33
SECTION 4.8. Control by Serial Noteholders . . . . . . . 33
SECTION 4.9. Waiver of Past Defaults . . . . . . . . . . 34
ARTICLE FIVE
CONCERNING THE INDENTURE TRUSTEE.
SECTION 5.1. Duties and Responsibilities of the
Indenture Trustee; During Default;
Prior to Default. . . . . . . . . . . . . 36
SECTION 5.2. Certain Rights of the Indenture Trustee . . 38
SECTION 5.3. Indenture Trustee Not Responsible for
Recitals, Disposition of Serial
Mortgage Notes or Application of
Proceeds Thereof. . . . . . . . . . . . . 39
SECTION 5.4. Indenture Trustee and Agents May Hold
Serial, Mortgage Notes;
Collections, etc. . . . . . . . . . . . . 40
SECTION 5.5. Moneys Held by Indenture Trustee. . . . . . 40
SECTION 5.6. Compensation and Expenses . . . . . . . . . 40
SECTION 5.7. Right of Indenture Trustee to Rely on
Officers' Certificate, etc . . . . . . . 42
SECTION 5.8. Persons Eligible for Appointment as
Indenture Trustee . . . . . . . . . . . . 42
SECTION 5.9. Resignation and Removal; Appointment of
Successor Indenture Trustee . . . . . . . 42
SECTION 5.10. Acceptance of Appointment by Successor
Indenture Trustee . . . . . . . . . . . . 44
SECTION 5.11. Merger, Conversion, Consolidation or
Succession to Business of Indenture
Trust . . . . . . . . . . . . . . . . . . 45
ARTICLE SIX
CONCERNING THE SERIAL NOTEHOLDERS.
SECTION 6.1. Evidence of Action Taken by Serial
Noteholder . . . . . . . . . . . . . . . . 46
SECTION 6.2. Proof of Execution of Instruments and of
Holding of Serial Mortgage Notes;
Record Date. . . . . . . . . . . . . . . . 46
SECTION 6.3. Holders to Be Treated as Owners. . . . . . . 46
SECTION 6.4. Serial Mortgage Notes Deemed Not
Outstanding. . . . . . . . . . . . . . . . 47
SECTION 6.5. Right of Revocation of Action Taken. . . . . 47
ARTICLE SEVEN
SUPPLEMENTAL INDENTURES.
SECTION 7.1. Supplemental Indentures Without Consent
of Serial Noteholders. . . . . . . . . . . 48
SECTION 7.2. Supplemental Indentures With Consent of
Serial Noteholders . . . . . . . . . . . . 49
SECTION 7.3. Effect of Supplemental Indenture . . . . . . 50
SECTION 7.4. Documents to Be Given to Indenture Trustee . 51
SECTION 7.5. Notation on Serial Mortgage Notes in
Respect of Supplemental Indentures . . . . 51
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE OR CONVEYANCE.
SECTION 8.1. Covenant Not to Merge, Consolidate, Sell
or Convey Property Except Under Certain
Conditions . . . . . . . . . . . . . . . . 51
SECTION 8.2. Successor Corporation Substituted . . . . . 52
SECTION 8.3. Opinion of Counsel to Indenture Trustee. . . 52
ARTICLE NINE
SATISFACTION AND DISCHARGE OF
SERIAL INDENTURE; UNCLAIMED MONEYS.
SECTION 9.1. Satisfaction and Discharge of Serial
Indenture. . . . . . . . . . . . . . . . . 52
SECTION 9.2. Application by Indenture Trustee of Funds
Deposited for Payment of Serial
Mortgage Notes . . . . . . . . . . . . . . 53
SECTION 9.3. Repayment of Moneys Held by Paying Agent . . 54
SECTION 9.4. Return of Moneys Held by Indenture
Trustee And Paying Agent Unclaimed for
Two Years. . . . . . . . . . . . . . . . . 54
ARTICLE TEN
MISCELLANEOUS PROVISIONS.
SECTION 10.1. Incorporators, Stockholders, Officers
and Directors of California Petroleum
Exempt from Individual Liability. . . . . 54
SECTION 10.2. Provisions of Serial Indenture for the
Sole Benefit of Parties and Serial
Noteholders . . . . . . . . . . . . . . . 55
SECTION 10.3. Successors and Assigns of California
Petroleum Bound by Serial Indentur. . . . 55
SECTION 10.4. Notices and Demands on California
Petroleum Indenture Trustee and
Serial Noteholders. . . . . . . . . . . . 55
SECTION 10.5. Officers' Certificates and Opinions of
Counsel; Statements to Be Contained
Therein . . . . . . . . . . . . . . . . . 56
SECTION 10.6. Payments Due on Saturdays, Sundays and
Holidays. . . . . . . . . . . . . . . . . 57
SECTION 10.7. Conflict of Any Provision of Serial
Indenture with Trust Indenture Act. . . . 57
SECTION 10.8. New York Law to Govern. . . . . . . . . . . 58
SECTION 10.9. Counterparts. . . . . . . . . . . . . . . . 58
SECTION 10.10. Effect of Headings. . . . . . . . . . . . . 58
SECTION 10.11. Designated Representative . . . . . . . . . 58
ARTICLE ELEVEN
REDEMPTION OF SERIAL MORTGAGE NOTES.
SECTION 11.1. Mandatory Redemption; Prices . . . . . . . 58
SECTION 11.2. Notice of Redemption; Partial Redemptions. 58
SECTION 11.3. Payment of Serial Mortgage Notes Called
for Redemption . . . . . . . . . . . . . 60
ARTICLE TWELVE
SECURITY.
SECTION 12.1. Security . . . . . . . . . . . . . . . . . 61
SECTION 12.2. Recording, etc . . . . . . . . . . . . . . 61
SECTION 12.3. Protection of the Trust Estate . . . . . . 63
SECTION 12.4. Release of Lien. . . . . . . . . . . . . . 63
EXHIBITS
EXHIBIT A - Form of Serial Mortgage Note
EXHIBIT B - Form of Collateral Agreement
THIS Serial Indenture, dated as of (DATE), 1994 among
CALIFORNIA PETROLEUM TRANSPORT CORPORATION, a Delaware corporation
("California Petroleum"), CHEMICAL TRUST COMPANY OF CALIFORNIA (the "Indenture
Trustee") and CHEVRON CORPORATION, a Delaware corporation ("Chevron"),
W I T N E S E T H :
WHEREAS, capitalized terms used herein shall have the
respective meanings set forth or referred to in Article One hereof;
WHEREAS, California Petroleum has duly authorized the issue of
its Serial Mortgage Notes and, to provide, among other things, for the
authentication, delivery and administration thereof, California Petroleum has
duly authorized the execution and delivery of this Serial Indenture.
WHEREAS, in order to secure its obligations under this Serial
Indenture and the Term Indenture, California Petroleum is entering into the
Collateral Agreement concurrently with this Serial Indenture;
WHEREAS, in order to comply with the provisions of the Trust
Indenture Act, it is necessary that Chevron be a party to this Serial
Indenture;
AND WHEREAS, all things necessary to make the Serial Mortgage
Notes, when executed by California Petroleum and authenticated and delivered
by the Indenture Trustee as in this Serial Indenture provided, the valid,
binding and legal obligations of California Petroleum, and to constitute these
presents a valid indenture and agreement according to its terms, have been
done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the
Serial Mortgage Notes by the holders thereof, California Petroleum, Chevron
and the Indenture Trustee mutually covenant and agree for the equal and
proportionate benefit of the respective holders from time to time of the
Serial Mortgage Notes as follows:
ARTICLE ONE
DEFINITIONS.
SECTION 1.1 Certain Terms Defined. The following terms
(except as otherwise expressly provided or unless the context otherwise
clearly requires) for all purposes of this Serial Indenture and of any
indenture supplemental hereto shall have the respective meanings specified in
this Section. All other terms used in this Serial Indenture which are defined
in the Trust Indenture Act or the definitions of which in the Securities Act
are referred to in the Trust Indenture Act (except as herein otherwise
expressly provided or unless the context otherwise clearly requires), shall
have the meanings assigned to such terms in said Trust Indenture Act and in
said Securities Act as in force at the date of this Serial Indenture. All
accounting terms used herein and not expressly defined shall have the meanings
given to them in accordance with generally accepted accounting principles, and
the term "generally accepted accounting principles" shall mean such accounting
principles which are generally accepted at the date or time of any computation
or at the date hereof. The words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Serial Indenture as a whole and not to
any particular Article, Section or other subdivision. All references to
Articles or Sections refer to Articles or Sections of this Serial Indenture
unless otherwise indicated. The terms defined in this Article include the
plural as well as the singular.
"Affiliate" means with respect to any Person (the "relevant
Person") (i) any other Person that directly, or indirectly through one or more
intermediaries, controls the relevant Person (a "Controlling Person") or (ii)
any Person (other than the relevant Person) which is controlled by or is under
common control with a Controlling Person. As used herein, the term "control"
means possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"Allocated Principal Amount" means, when used with reference to
the Serial Mortgage Notes relating to any Vessel at any time, an aggregate
principal amount of Outstanding Serial Mortgage Notes equal to the aggregate
principal amount of the Serial Loan then outstanding under the Serial Loan
Agreement of the related Owner.
"Assignment of Earnings and Insurances" has the meaning set
forth in the Collateral Agreement.
"Assignment of Initial Charter" has the meaning set forth in
the Collateral Agreement.
"Assignment of Management Agreement" has the meaning set forth
in the Collateral Agreement.
"Assignment of Mortgage" has the meaning set forth in the
Collateral Agreement.
"Authorized Financial Officer" of any Person means the Chief
Financial Officer, Treasurer or Controller of such Person.
"Bankruptcy Code" means the United States Bankruptcy Code of
1978, as amended.
"Board of Directors" means either the Board of Directors of
California Petroleum or any committee of such Board duly authorized to act
hereunder.
"Business Day" means any day except a Saturday or a Sunday or
other day on which commercial banks are authorized by law to close in New York
City or in the city and state where the principal offices of the paying agent
appointed pursuant to Section 3.4 are located.
"California Petroleum" means California Petroleum Transport
Corporation, a Delaware corporation.
"Casualty Account" has the meaning set forth in the Collateral
Agreement.
"Chevron" means Chevron Corporation, a Delaware corporation
and, subject to Article Eight, its successors and assigns.
"Chevron Guarantees" means the Initial Charter Guarantees.
"Chevron Transport" means Chevron Transport Corporation, a
Liberian corporation.
"Closing Date" means ____________, 1994.
"Collateral" means the property in which the Collateral
Trustee, in its own right or as assignee of California Petroleum, is granted a
Lien from time to time under any Security Document, which lien or security
interest has not been released in accordance with the terms of the Collateral
Agreement or thereof.
"Collateral Account" has the meaning set forth in the
Collateral Agreement.
"Collateral Agreement" means the Collateral Trust Agreement
dated as of (DATE), 1994 among California Petroleum, the Collateral Trustee,
the Indenture Trustee and the Term Indenture Trustee, as the same may be
amended from time to time.
"Collateral Assignment of Initial Charter" has the meaning set
forth in the Collateral Agreement.
"Collateral Assignment of Initial Charter Guarantee" has the
meaning set forth in the Collateral Agreement.
"Collateral Trustee" means Chemical Trust Company of California, in
its capacity as trustee under the Collateral Agreement, or any other Person
acting from time to time as trustee under the Collateral Agreement.
"Commission" means the Securities and Exchange Commission.
"Compulsory Acquisition" means requisition for title or other
compulsory acquisition of any Vessel (otherwise than by requisition for hire),
capture, seizure, condemnation, destruction, detention or confiscation of such
Vessel by any government or by persons acting or purporting to act on behalf
of any governmental authority.
"Corporate Trust Office" means the office of the Indenture
Trustee at which the corporate trust business of the Indenture Trustee shall,
at any particular time, be principally administered, which office is, at the
date as of which this Serial Indenture is dated, located at 50 California
Street, 10th Floor, San Francisco, California, 94111.
"Default" means any Indenture Event of Default or any event or
condition which, with the giving of notice or lapse of time, or both would
constitute an Indenture Event of Default.
"Default Rate" means a rate per annum for each day from the
date of a default in any payment hereunder until such payment shall be paid in
full equal to 1.50% above LIBOR at the commencement of such period.
"Depository" means the depository of the Global Securities
representing the Serial Mortgage Notes and any successor to such Depository
appointed pursuant to Section 2.9(c). The Depositary initially shall be
Depository Trust Company, as New York corporation.
"Enforcement Notice" means a notice delivered to the Collateral
Trustee pursuant to Section 4.10.
"Equity Account" has the meaning set forth in the Collateral
Agreement.
"Exchange Act" means the United States Securities Exchange Act
of 1934, as amended.
"Global Security" means the Serial Mortgage Note or Notes
registered in the name of the Depository or its nominee in accordance with
Article Two and bearing the legend prescribed in Section 2.9(a).
"Holder", "holder of Serial Mortgage Notes", "Serial
Noteholder" or other similar terms means the registered holder of any Serial
Mortgage Note.
"Indenture Event of Default" means any event or condition
specified as such in Section 4.1 which shall have continued for the period of
time, if any, therein designated.
"Indenture Trustee" means Chemical Trust Company of California,
in its capacity as trustee under this Serial Indenture, or any other Person
acting from time to time as trustee hereunder.
"Initial Charter" has the meaning set forth in the Collateral
Agreement.
"Initial Charter Guarantee" has the meaning set forth in the
Collateral Agreement.
"Initial Charterer" means, for each Initial Charter, Chevron
Transport as the charterer thereunder, and any permitted successor or assignee
thereof.
"Initial Revenue Account" has the meaning set forth in the
Collateral Agreement.
"Issue of One Debenture" has the meaning set forth in the
Collateral Agreement.
"LIBOR" means the rate calculated on the basis of the offered
rates for deposits in dollars for a month period which appear on the Reuters
Screen LIBO Page as of 11:00 a.m., London time, on the date that is two London
Banking Days preceding the date of calculation. If at least two such offered
rates appear on the Reuters Screen LIBO Page, LIBOR will be the arithmetic
mean of such offered rates (rounded to the nearest .0001 percentage point).
If, at any time of determination, the Reuters Screen LIBO Page is not
available, LIBOR will be calculated as the average (rounded upward, if
necessary, to the next higher 1/16 of 1%) of the respective ratio per annum at
which deposits in dollars for a one month period are offered to each of three
reference banks in the London interbank market at approximately 11:00 a.m.,
London time,on the date that is two London Banking Days preceding the date of
calculation. Each of Chevron and the Indenture Trustee will select a
reference bank and the third reference bank will be selected by Chevron and the
Indenture Trustee together or, failing agreement, by the previously selected
reference banks together.
"Lien" means with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such asset. For the purposes of this Collateral Agreement, a Person shall be
deemed to own subject to a Lien any asset which it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
asset.
"Loan Agreements" means the Serial Loan Agreements and the Term
Loan Agreements, collectively.
"London Banking Day" means any day on which dealings in
deposits in United States dollars are carried on in the London interbank
market and on which commercial banks are open for domestic and international
business (including dealings in dollar deposits) in London and New York.
"Management Agreement" has the meaning set forth in the
Collateral Agreement.
"Mortgage" means, for each Vessel, the First Preferred Ship
Mortgage for such Vessel, dated the date of the related Initial Charter,
between the related Owner and California Petroleum, as the same may be amended
from time to time.
"Mortgage Event of Default" means, for any Mortgage, each of
the events designated as an "Event of Default" in Section 5.01 of such
Mortgage.
"Officers' Certificate" means a certificate signed by a
Responsible Officer of California Petroleum or Chevron, as the case may be,
and delivered to the Indenture Trustee. Each such certificate shall comply
with Section 314 of the Trust Indenture Act and include the statements
provided for in Section 10.5.
"Operating Account" has the meaning set forth in the Collateral
Agreement.
"Opinion of Counsel" means an opinion in writing signed by
legal counsel satisfactory to the Indenture Trustee (who may be an employee of
or counsel to Chevron). Each such opinion shall comply with Section 314 of
the Trust Indenture Act and include the statements provided for in Section
10.5, if and to the extent required hereby.
"Original issue date" of any Serial Mortgage Note (or portion
thereof) means the earlier of (a) the date of such Serial Mortgage Note or (b)
the date of any Serial Mortgage Note (or portion thereof) for which such Serial
Mortgage Note was issued (directly or indirectly) on registration of transfer,
exchange or substitution.
"Outstanding", when used with reference to Serial Mortgage
Notes, shall, subject to the provisions of Section 6.4, mean, as of any
particular time, all Serial Mortgage Notes authenticated and delivered by the
Indenture Trustee under this Serial Indenture, except
(a) Serial Mortgage Notes theretofore canceled by the
Indenture Trustee or delivered to the Indenture Trustee for
cancellation;
(b) Serial Mortgage Notes, or portions thereof, for the
payment or redemption of which moneys in the necessary amount shall
have been deposited in trust with the Indenture Trustee or with any
paying agent, provided that if such Serial Mortgage Notes are to be
redeemed prior to the maturity thereof, notice of such redemption
shall have been given as herein provided, or provision satisfactory
to the Indenture Trustee shall have been made for giving such notice;
and
(c) Serial Mortgage Notes in substitution for which other
Serial Mortgage Notes shall have been authenticated and delivered, or
which shall have been paid, pursuant to the terms of Section 2.6
(unless proof satisfactory to the Indenture Trustee is presented that
any of such Serial Mortgage Notes is held by a person in whose hands
such Serial Mortgage Note is a legal, valid and binding obligation of
California Petroleum).
"Owner" means CalPetro Tankers (Bahamas I) Limited, in the case
of the Vessel m.t. Samuel Ginn, CalPetro Tankers (Bahamas II) Limited, in the
case of the Vessel m.t. Condoleezza Rice, CalPetro Tankers (IOM) Limited, in
the case of the Vessel m.t. Chevron Mariner, or CalPetro Tankers (Bahamas III)
Limited, in the case of the Vessel m.t. William E. Crain.
"Permitted Investments" has the meaning set forth in the
Collateral Agreement.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Pledged Stock" has the meaning set forth in the Collateral
Agreement.
"Rating Agencies" means Moody's Investors Service, Inc.,
Standard & Poor's Ratings Group and Duff & Phelps Credit Rating Co.
"Related Security Documents" means, at any time, the Security
Documents relating to the Vessels for which the Initial Charters are in effect
at such time and under which the first termination date has not occurred.
"Responsible Officer" means the president or any other officer
with authority of at least a vice president; or, in the case of the Indenture
Trustee means an officer or assistant officer of the Indenture Trustee in its
Corporate Trust Department.
"Second Revenue Account" has the meaning set forth in the
Collateral Agreement.
"Secured Instruments" has the meaning set forth in the
Collateral Agreement.
"Securities Act" means the United States Securities Act of
1933, as amended.
"Security Documents" means the Collateral Agreement, the Loan
Agreements, the Mortgages, the Assignments of Mortgage, the Assignments of
Initial Charter, the Collateral Assignments of Initial Charter, the
Assignments of Earnings and Insurances, the Assignments of Initial Charter
Guarantee, the Collateral Assignments of Initial Charter Guarantee, the
Assignments of Management Agreement, each Issue of One Debenture, the Stock
Pledge, the Vessel Purchase Agreement Assignments, and any additional security
agreement, assignment or mortgage document entered into by California
Petroleum from time to time in connection with the Secured Instruments or
received by California Petroleum from any Owner in connection with such
Owner's Loan Agreements.
"Serial Indenture" means this Serial Indenture dated as of (DATE),
1994 among California Petroleum, the Indenture Trustee, and, solely for
purposes of the Trust Indenture Act, Chevron, as the same may be amended from
time to time.
"Serial Loan Agreement" means, for any Owner, the Serial Loan
Agreement dated as of (DATE), 1994 between such Owner and California
Petroleum, as the same may be amended from time to time.
"Serial Loans" has, for any Owner, the meaning set forth in the
Serial Loan Agreement entered into by such Owner.
"Serial Mortgage Note" or "Serial Mortgage Notes" means any
Serial First Preferred Mortgage Note or Notes, as the case may be,
authenticated and delivered under this Serial Indenture.
"Stock Pledge" has the meaning set forth in the Collateral
Agreement.
"Term Indenture" means the Term Indenture dated as of (DATE),
1994 between California Petroleum and the Term Indenture Trustee, as the same
may be amended from time to time.
"Term Indenture Trustee" means Chemical Trust Company of
California or any other Person from time to time acting as the trustee under
the Term Indenture.
"Term Loan Agreement" means, for any Owner, the Term Loan
Agreement dated as of (DATE), 1994 between such Owner and California
Petroleum, as the same may be amended from time to time.
"Term Mortgage Notes" has the meaning set forth in the Term
Indenture.
"Termination Account" has the meaning set forth in the
Collateral Agreement.
"Total Loss" means (a) an actual or constructive or compromised
or arranged total loss of a Vessel, (b) a Compulsory Acquisition of a Vessel
or (c) if so declared by Chevron Transport at any time and in its sole
discretion a requisition for hire of the Vessel for a period in excess of 180
days.
"Trust Accounts" means the Initial Revenue Account, the Second
Revenue Account, the Termination Account, the Operating Account, the Equity
Account, the Casualty Account and the Collateral Account.
"Trust Estate" means the property rights and privileges
described in the Granting Clause of the Collateral Agreement.
"Trust Funds" means the funds deposited in the Trust Accounts.
"Trust Indenture Act" means the United States Trust Indenture
Act of 1939, as amended.
"UCC" means the Uniform Commercial Code as in effect on the
date hereof in the State of New York or any other applicable jurisdiction.
"Vessel Purchase Agreement" has the meaning set forth in the
Collateral Agreement.
"Vessel Purchase Agreement Assignment" has the meaning set
forth in the Collateral Agreement.
"Vessels" means, collectively, the four Suezmax-size tankers to
be acquired by the Owners and chartered to the Initial Charterer pursuant to
the Initial Charters.
ARTICLE TWO
ISSUE, EXECUTION, FORM AND
REGISTRATION OF SERIAL MORTGAGE NOTES.
SECTION 2.1 Authentication and Delivery of Serial Mortgage
Notes. Upon the execution and delivery of this Serial Indenture, or from time
to time thereafter, Serial Mortgage Notes in an aggregate principal amount not
in excess of $168,500,000 (except as otherwise provided in Section 2.6) may be
executed by California Petroleum and delivered to the Indenture Trustee for
authentication, and an authorized officer of the Indenture Trustee shall
thereupon authenticate and deliver said Serial Mortgage Notes to or upon the
written order of California Petroleum, signed by both (a) its President or any
Vice President and (b) by its Treasurer or any Assistant Treasurer without any
further action by California Petroleum.
The Serial Mortgage Notes initially shall be issued in the
principal amounts, interest rates and maturities stated below:
$18,160,000 principal amount of __%
Serial First Preferred Mortgage Notes Due 1995;
$18,160,000 principal amount of __%
Serial First Preferred Mortgage Notes Due 1996;
$18,160,000 principal amount of __%
Serial First Preferred Mortgage Notes Due 1997;
$18,160,000 principal amount of __%
Serial First Preferred Mortgage Notes Due 1998;
$18,160,000 principal amount of __%
Serial First Preferred Mortgage Notes Due 1999;
$18,160,000 principal amount of __%
Serial First Preferred Mortgage Notes Due 2000;
$18,160,000 principal amount of __%
Serial First Preferred Mortgage Notes Due 2001;
$18,160,000 principal amount of __%
Serial First Preferred Mortgage Notes Due 2002;
$12,950,000 principal amount of __%
Serial First Preferred Mortgage Notes Due 2003;
$7,740,000 principal amount of __%
Serial First Preferred Mortgage Notes Due 2004; and
$2,530,000 principal amount of __%
Serial First Preferred Mortgage Notes Due 2005.
SECTION 2.2 Execution of Serial Mortgage Notes. The Serial
Mortgage Notes shall be signed on behalf of California Petroleum by both (a)
its President or any Vice President and (b) by its Treasurer or any Assistant
Treasurer or its Secretary or any Assistant Secretary, under its corporate
seal which may, but need not, be attested. Such signatures may be the manual
or facsimile signatures of the present or any future such officers. The seal
of California Petroleum may be in the form of a facsimile thereof and may be
impressed, affixed, imprinted or otherwise reproduced on the Serial Mortgage
Notes. Typographical and other minor errors or defects in any such
reproduction of the seal or any such signature shall not affect the validity
or enforceability of any Serial Mortgage Note which has been duly
authenticated and delivered by the Indenture Trustee.
In case any officer of California Petroleum who shall have
signed any of the Serial Mortgage Notes shall cease to be such officer before
the Serial Mortgage Note so signed shall be authenticated and delivered by the
Indenture Trustee or disposed of by California Petroleum, such Serial Mortgage
Note nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Serial Mortgage Note had not ceased to be such
officer of California Petroleum; and any Serial Mortgage Note may be signed on
behalf of California Petroleum by such persons as, at the actual date of the
execution of such Serial Mortgage Note, shall be the proper officers of
California Petroleum, although at the date of the execution and delivery of
this Serial Indenture any such person was not such officer.
SECTION 2.3 Certificate of Authentication. Only such Serial
Mortgage Notes as shall bear thereon a certificate of authentication
substantially in the form set forth in Exhibit A hereto executed by the
Indenture Trustee by manual signature of one of its authorized officers, shall
be entitled to the benefits of this Serial Indenture or be valid or obligatory
for any purpose. Such certificate by the Indenture Trustee upon any Serial
Mortgage Note executed by California Petroleum shall be conclusive evidence
that the Serial Mortgage Note so authenticated has been duly authenticated and
delivered hereunder and that the holder is entitled to the benefits of this
Serial Indenture.
SECTION 2.4 Form, Denomination and Date of Serial Mortgage
Notes; Payments of Interest. The Serial Mortgage Notes and the Indenture
Trustee's certificates of authentication shall be substantially in the form
attached hereto as Exhibit A and incorporated by reference herein. The Serial
Mortgage Notes shall be issuable as registered securities without coupons and
in denominations provided for in such form of Serial Mortgage Note. The
Serial Mortgage Notes shall be numbered, lettered, or otherwise distinguished
in such manner or in accordance with such plans as the officers of California
Petroleum executing the same may determine with the approval of the Indenture
Trustee.
Any of the Serial Mortgage Notes may be issued with appropriate
insertions, omissions, substitutions and variations, and may have imprinted or
otherwise reproduced thereon such legend or legends, not inconsistent with the
provisions of this Serial Indenture, as may be required to comply with any law
or with any rules or regulations pursuant thereto, or with the rules of any
securities market in which the Serial Mortgage Notes are admitted to trading,
or to conform to general usage.
Each Serial Mortgage Note shall be dated the date of its
authentication, shall bear interest from the applicable date and shall be
payable on the dates specified on the face of the form of Serial Mortgage
Note. Interest will accrue at the Default Rate on any overdue payment of
principal of, interest or any other amount payable on any Serial Mortgage Note
from the due date for such payment to the date such amount is paid in full and
shall be payable on demand.
The person in whose name any Serial Mortgage Note is registered
at the close of business on any record date with respect to any interest
payment date shall be entitled to receive the interest, if any, payable on
such interest payment date notwithstanding any transfer or exchange of such
Serial Mortgage Note subsequent to the record date and prior to such interest
payment date, except if and to the extent California Petroleum shall default
in the payment of the interest due on such interest payment date, in which
case such defaulted interest shall be paid to the persons in whose names
Outstanding Serial Mortgage Notes are registered at the close of business on a
subsequent record date (which shall be not less than five business days prior
to the date of payment of such defaulted interest) established by notice given
by mail by or on behalf of California Petroleum to the holders of Serial
Mortgage Notes not less than 15 days preceding such subsequent record date.
The term "record date" as used with respect to any interest payment date
(except a date for payment of defaulted interest) shall mean if such interest
payment date is the first day of a calendar month, the fifteenth day of the
next preceding calendar month and shall mean, if such interest payment date is
the fifteenth day of a calendar month, the first day of such calendar month,
whether or not such record date is a business day.
SECTION 2.5 Registration, Transfer and Exchange. California
Petroleum will keep at each office or agency to be maintained for the purpose
as provided in Section 3.2 a register or registers in which, subject to such
reasonable regulations as it may prescribe, it will register, and will
register the transfer of, Serial Mortgage Notes as provided in this Article.
Such register shall be in written form in the English language or in any other
form capable of being converted into such form within a reasonable time. At
all reasonable times such register or registers shall be open for inspection
by the Indenture Trustee.
Upon due presentation for registration of transfer of any
Serial Mortgage Note at each such office or agency, California Petroleum shall
execute and the Indenture Trustee shall authenticate and deliver in the name
of the transferee or transferees a new Serial Mortgage Note or Serial Mortgage
Notes in authorized denominations for a like aggregate principal amount.
Any Serial Mortgage Note or Serial Mortgage Notes may be
exchanged for a Serial Mortgage Note or Serial Mortgage Notes in other
authorized denominations, in an equal aggregate principal amount. Serial
Mortgage Notes to be exchanged shall be surrendered at each office or agency
to be maintained by California Petroleum for the purpose as provided in
Section 3.2, and California Petroleum shall execute and the Indenture Trustee
shall authenticate and deliver in exchange therefor the Serial Mortgage Note or
Serial Mortgage Notes which the Serial Noteholder making the exchange shall be
entitled to receive, bearing numbers not contemporaneously outstanding.
All Serial Mortgage Notes presented for registration of
transfer, exchange, redemption or payment shall (if so required by California
Petroleum or the Indenture Trustee) be duly endorsed by, or be accompanied by
a written instrument or instruments of transfer in form satisfactory to
California Petroleum and the Indenture Trustee duly executed by, the holder or
his attorney duly authorized in writing.
California Petroleum may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any exchange or registration of transfer of Serial Mortgage Notes. No
service charge shall be made for any such transaction.
California Petroleum shall not be required to exchange or
register a transfer of (a) any Serial Mortgage Notes for a period of 15 days
next preceding the first mailing of notice of redemption of Serial Mortgage
Notes to be redeemed, or (b) any Serial Mortgage Notes selected, called or
being called for redemption except, in the case of any Serial Mortgage Note
where public notice has been given that such Serial Mortgage Note is to be
redeemed in part, the portion thereof not so to be redeemed.
All Serial Mortgage Notes issued upon any transfer or exchange
of Serial Mortgage Notes shall be valid obligations of California Petroleum,
evidencing the same debt, and entitled to the same benefits under this Serial
Indenture, as the Serial Mortgage Notes surrendered upon such transfer or
exchange.
SECTION 2.6 Mutilated, Defaced, Destroyed, Lost and Stolen
Serial Mortgage Notes. In case any temporary or definitive Serial Mortgage
Note shall become mutilated, defaced or be apparently destroyed, lost or
stolen, California Petroleum in its discretion may execute, and upon the
written request of any officer of California Petroleum, the Indenture Trustee
shall authenticate and deliver, a new Serial Mortgage Note, bearing a number
not contemporaneously outstanding, in exchange and substitution for the
mutilated or defaced Serial Mortgage Note, or in lieu of and substitution for
the Serial Mortgage Note so apparently destroyed, lost or stolen. In every
case the applicant for a substitute Serial Mortgage Note shall furnish to
California Petroleum and to the Indenture Trustee and any agent of California
Petroleum or the Indenture Trustee such security or indemnity as may be
required by them to indemnify and defend and to save each of them harmless
and, in every case of destruction, loss or theft evidence to their satisfaction
of the apparent destruction, loss or theft of such Serial Mortgage Note and of
the ownership thereof.
Upon the issuance of any substitute Serial Mortgage Note,
California Petroleum may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Indenture Trustee)
connected therewith. In case any Serial Mortgage Note which has matured or is
about to mature, or has been called for redemption in full, shall become
mutilated or defaced or be apparently destroyed, lost or stolen, California
Petroleum may, instead of issuing a substitute Serial Mortgage Note, pay or
authorize the payment of the same (without surrender thereof except in the
case of a mutilated or defaced Serial Mortgage Note), if the applicant for
such payment shall furnish to California Petroleum and to the Indenture
Trustee and any agent of California Petroleum or the Indenture Trustee such
security or indemnity as any of them may require to save each of them harmless
from all risks, however remote, and, in every case of apparent destruction,
loss or theft, the applicant shall also furnish to California Petroleum and
the Indenture Trustee and any agent of California Petroleum or the Indenture
Trustee evidence to their satisfaction of the apparent destruction, loss or
theft of such Serial Mortgage Note and of the ownership thereof.
Every substitute Serial Mortgage Note issued pursuant to the
provisions of this Section by virtue of the fact that any Serial Mortgage Note
is apparently destroyed, lost or stolen shall constitute an additional
contractual obligation of California Petroleum, whether or not the apparently
destroyed, lost or stolen Serial Mortgage Note shall be at any time
enforceable by anyone and shall be entitled to all the benefits of (but shall
be subject to all the limitations of rights set forth in) this Serial
Indenture equally and proportionately with any and all other Serial Mortgage
Notes duly authenticated and delivered hereunder. All Serial Mortgage Notes
shall be held and owned upon the express condition that, to the extent
permitted by law, the foregoing provisions are exclusive with respect to the
replacement or payment of mutilated, defaced, or apparently destroyed, lost or
stolen Serial Mortgage Notes and shall preclude any and all other rights or
remedies notwithstanding any law or statute existing or hereafter enacted to
the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.
SECTION 2.7 Cancellation of Serial Mortgage Notes; Destruction
Thereof. All Serial Mortgage Notes surrendered for payment, redemption,
registration of transfer or exchange, if surrendered to California Petroleum
or any agent of California Petroleum or the Indenture Trustee, shall be
delivered to the Indenture Trustee for cancellation or, if surrendered to the
Indenture Trustee, shall be canceled by it; and no Serial Mortgage Notes shall
be issued in lieu thereof except as expressly permitted by any of the
provisions of this Serial Indenture. The Indenture Trustee shall destroy
canceled Serial Mortgage Notes held by it and deliver a certificate of
destruction to California Petroleum. If California Petroleum shall acquire
any of the Serial Mortgage Notes, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Serial
Mortgage Notes unless and until the same are delivered to the Indenture
Trustee for cancellation.
SECTION 2.8 Temporary Serial Mortgage Notes. Pending the
preparation of definitive Serial Mortgage Notes, California Petroleum may
execute and the Indenture Trustee shall authenticate and deliver temporary
Serial Mortgage Notes (printed, lithographed, typewritten or otherwise
reproduced, in each case in form satisfactory to the Indenture Trustee).
Temporary Serial Mortgage Notes shall be issuable as registered Serial
Mortgage Notes without coupons, of any authorized denomination, and
substantially in the form of the definitive Serial Mortgage Notes but with
such omissions, insertions and variations as may be appropriate for temporary
Serial Mortgage Notes, all as may be determined by California Petroleum with
the concurrence of the Indenture Trustee. Temporary Serial Mortgage Notes may
contain such reference to any provisions of this Serial Indenture as may be
appropriate. Every temporary Serial Mortgage Note shall be executed by
California Petroleum and be authenticated by the Indenture Trustee upon the
same conditions and in substantially the same manner, and with like effect, as
the definitive Serial Mortgage Notes. Without unreasonable delay California
Petroleum shall execute and shall furnish definitive Serial Mortgage Notes and
thereupon temporary Serial Mortgage Notes may be surrendered in exchange
therefor without charge at each office or agency to be maintained by
California Petroleum for the purpose pursuant to Section 3.2, and the Indenture
Trustee shall authenticate and deliver in exchange for such temporary Serial
Mortgage Notes a like aggregate principal amount of definitive Serial Mortgage
Notes of authorized denominations. Until so exchanged the temporary Serial
Mortgage Notes shall be entitled to the same benefits under this Serial
Indenture as definitive Serial Mortgage Notes.
SECTION 2.9 Serial Mortgage Notes Issuable in Global Form;
Depository. At the sole option of Chevron, this Section shall apply to the
Serial Mortgage Notes, and to the extent that the provisions of this Section
conflict with any other provisions of this Serial Indenture, the provisions of
this Section shall control.
(a) California Petroleum shall execute, and the Indenture
Trustee shall authenticate and deliver, in each case in accordance with this
Article, one or more Global Securities for each maturity specified in Section
2.1 which shall: (i) represent and be denominated in an aggregate amount
equal to the aggregate principal amount of the Serial Mortgage Notes to be
represented thereby, (ii) be registered in the name of the Depository or its
nominee, (iii) be deposited with the Indenture Trustee as custodian for the
Depository and (iv) bear a legend substantially to the following effect:
"Unless and until this Serial Mortgage Note is presented by an authorized
representative of the Depository Trust Company ("DTC"), to California Transport
Corporation or its agents for registration of transfer, exchange or payment,
and any Serial Mortgage Note issued is registered in the name of Cede & Co. or
to such other entity or such other name as is requested by an authorized
representative of DTC (and any payment hereon is made to Cede & Co.), any
transfer, pledge or other use hereof for value or otherwise by or to any
Person is wrongful since the registered owner hereof, Cede & Co., has an
interest herein." The notation of the record owner's interest in such Global
Security upon the original issuance thereof shall be deemed to be delivered in
connection with the original issuance of each beneficial owner's interest in
such Global Security. Without limiting the foregoing, California Petroleum
and the Indenture Trustee shall have no responsibility, obligation or
liability with respect to: (x) the maintenance, review or accuracy of the
records of the Depository or of any of its participating organizations with
respect to any ownership interest in or payments with respect to such Global
Security, (y) any communication with or delivery of any notice (including
notices of redemption) with respect to the Serial Mortgage Notes represented
by the Global Security to any Person having any ownership interest in such
Global Security or to any of the Depository's participating organizations or
(z) any payment made on account of any beneficial ownership interest in such
Global Security.
(b) If any Serial Mortgage Note is issuable in the form of a
Global Security or Securities, each such Global Security may provide that it
shall represent the aggregate amount of Outstanding Serial Mortgage Notes from
time to time endorsed thereon and may also provide that the aggregate amount
of Outstanding Serial Mortgage Notes represented thereby may from time to time
be reduced to reflect exchanges. Any endorsement of a Global Security to
reflect the amount of Outstanding Serial Mortgage Notes represented thereby
shall be made by the Indenture Trustee and in such a manner as shall be
specified on such Global Security. Any instructions by California Petroleum
with respect to a Global Security, after its initial issuance, shall be in
writing but need not comply with Section 10.5 of this Serial Indenture.
(c) The Depository must at all times be a clearing agency
registered under the Exchange Act, and any other applicable statute or
regulation. If at any time the Depository notifies California Petroleum,
Chevron and the Indenture Trustee that it is unwilling or unable to continue
as the depository or if at any time the Depository shall no longer be eligible
under this Section 2.9, Chevron shall appoint a successor Depository. If a
successor Depository is not appointed by Chevron within 90 days after Chevron
receives such notice or learns of such ineligibility, California Petroleum
shall execute and California Petroleum shall direct the Indenture Trustee to
authenticate and deliver definitive Serial Mortgage Notes in authorized
denominations in exchange for the Global Security or Securities. Upon receipt
of such direction, the Indenture Trustee shall thereupon authenticate and
deliver the definitive Serial Mortgage Notes in the same aggregate principal
amount as the Global Security or Securities representing such Serial Mortgage
Notes in exchange for such Global Security or Securities, in accordance with
the provisions of subsection (e) of this Section 2.9, without any further
corporate action by California Petroleum.
(d) Chevron may at any time and in its sole discretion
determine that the Serial Mortgage Notes issued in the form of one or more
Global Securities shall no longer be represented by such Global Security or
Securities. In such event, California Petroleum will execute and upon receipt
of a written order from California Petroleum, the Indenture Trustee shall
thereupon authenticate and deliver Serial Mortgage Notes in definitive form
and in authorized denominations in an aggregate principal amount equal to the
principal amount of the Global Security or Securities representing such Serial
Mortgage Notes in exchange for such Global Security or Securities, in
accordance with the provisions of subsection (e) of this Section 2.9 without
any further corporate action by California Petroleum.
(e) Upon any exchange hereunder of the Global Security or
Securities for Serial Mortgage Notes in definitive form, such Global Security
or Securities shall be canceled by the Indenture Trustee. Serial Mortgage
Notes issued hereunder in exchange for the Global Security or Serial Mortgage
Notes shall be registered in such names and in such authorized denominations
as the Depository, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Indenture Trustee. The
Indenture Trustee shall deliver such definitive Serial Mortgage Notes in
exchange for Global Security or Serial Mortgage Notes to the Persons in whose
name such definitive Serial Mortgage Notes have been registered in accordance
with the directions of the Depository.
ARTICLE THREE
COVENANTS
SECTION 3.1. Payment of Principal and Interest. California
Petroleum covenants and agrees that it will duly and punctually pay or cause
to be paid the principal of, and interest on, each of the Serial Mortgage
Notes at the place or places, at the respective times and in the manner
provided in this Serial Indenture and the Serial Mortgage Notes. California
Petroleum covenants and agrees to pay on demand interest at the Default Rate
on any overdue payment of principal of, interest or any other amount payable
on any Serial Mortgage Note from the due date for such payment to the date
such amount is paid in full.
SECTION 3.2 Offices for Payments, etc. So long as any of the
Serial Mortgage Notes remain Outstanding, California Petroleum will maintain
in New York, the following: (a) an office or agency where the Serial Mortgage
Notes may be presented for payment, (b) an office or agency where the Serial
Mortgage Notes may be presented for registration of transfer and for exchange
as in this Serial Indenture provided and (c) an office or agency where notices
and demands to or upon California Petroleum in respect of the Serial Mortgage
Notes or of this Serial Indenture may be served. California Petroleum will
give to the Indenture Trustee written notice of the location of any such
office or agency and of any change of location thereof. California Petroleum
hereby initially designates the Corporate Trust Office of the Indenture
Trustee as the office or agency for each such purpose. In case California
Petroleum shall fail to maintain any such office or agency or shall fail to
give such notice of the location or of any change in the location thereof,
presentations and demands may be made and notices may be served at the
Corporate Trust Office.
SECTION 3.3 Appointment to Fill a Vacancy in Office of
Indenture Trustee. California Petroleum, whenever necessary to avoid or fill
a vacancy in the office of Indenture Trustee, will, with the consent of
Chevron, appoint, in the manner provided in Section 5.9, an Indenture Trustee,
so that there shall at all times be an Indenture Trustee hereunder.
SECTION 3.4 Paying Agents. Whenever the Indenture Trustee
shall appoint a paying agent, it will cause such paying agent to execute and
deliver an instrument in which such agent shall agree with the Indenture
Trustee, subject to the provisions of this Section,
(a) that it will hold all sums received by it as such agent
for the payment of the principal of or interest on the Serial
Mortgage Notes (whether such sums have been paid to it by California
Petroleum or by any other obligor on the Serial Mortgage Notes) in
trust for the benefit of the holders of the Serial Mortgage Notes or
of the Indenture Trustee, and
(b) that it will give the Indenture Trustee notice of any
failure by California Petroleum (or by any other obligor on the
Serial Mortgage Notes) to make any payment of the principal of or
interest on the Serial Mortgage Notes when the same shall be due and
payable.
So long as the Collateral Agreement is in effect, the paying agent for the
Serial Mortgage Notes shall be the Collateral Trustee pursuant to and in
accordance with the provisions of the Collateral Agreement and hereof.
Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section are subject to the
provisions of Sections 9.3 and 9.4.
SECTION 3.5 Reports by California Petroleum. California
Petroleum covenants:
(a) to file with the Indenture Trustee, within 15 days after
California Petroleum is required to file the same with the
Commission, copies of the annual reports and of the information,
documents, and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules and
regulations prescribe) which California Petroleum may be required to
file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act, or, if California Petroleum is not required to file
information, documents, or reports pursuant to either of such
Sections of the Exchange Act, then to file with the Indenture Trustee
and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents, and reports which
may be required pursuant to Section 13 of the Exchange Act, or, in
respect of a security listed and registered on a national securities
exchange, as may be prescribed from time to time in such rules and
regulations;
(b) to file with the Indenture Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by
the Commission, such additional information, documents, and reports
with respect to compliance by California Petroleum with the
conditions and covenants provided for in this Indenture as may be
required from time to time by such rules and regulations;
(c) to transmit to the holders of the Serial Mortgage Notes
in the manner and to the extent required by Section 313(c) of the
Trust Indenture Act, within 30 days after the filing thereof with the
Indenture Trustee, such summaries of any information, documents and
reports required to be filed by California Petroleum pursuant to
subsections (a) and (b) of this Section 3.5 as may be required by
rules and regulations prescribed from time to time by the Commission;
and
(d) furnish to the Indenture Trustee, on or before each
August 1, commencing in 1995, a brief certificate from the principal
executive officer, principal financial officer or principal accounting
officer of California Petroleum as to his or her knowledge of
California Petroleum's compliance with all conditions and covenants
under this Indenture. For purposes of this subsection (d), such
compliance shall be determined without regard to any period of grace
or requirement of notice provided under this Indenture.
SECTION 3.6 Reports by the Indenture Trustee. The Indenture
Trustee shall on or before each August 1, commencing in 1995, transmit in the
manner and to the extent required by Section 313(c) of the Trust Indenture
Act, any report required by Section 313(a) of the Trust Indenture Act to be
transmitted by the Indenture Trustee to the holders of the Serial Mortgage
Notes.
SECTION 3.7 Serial Noteholders' Lists. If and so long as the
Indenture Trustee shall not be the Serial Mortgage Note registrar, California
Petroleum will furnish or cause to be furnished to the Indenture Trustee a
list in such form as the Indenture Trustee may reasonably require of the names
and addresses of the holders of the Serial Mortgage Notes pursuant to Section
312 of the Trust Indenture Act (a) semi-annually not more than 15 days after
each record date for the payment of semi-annual interest on the Serial
Mortgage Notes, as hereinabove specified, as of such record date, and (b) at
such other times as the Indenture Trustee may request in writing, within
thirty days after receipt by California Petroleum of any such request as of a
date not more than 15 days prior to the time such information is furnished.
SECTION 3.8 Negative Covenants. California Petroleum will not:
(a) create, incur, assume or issue, directly or
indirectly, guarantee or in any manner become, directly or
indirectly, liable for or with respect to the payment of any
indebtedness, except for its obligations under this Serial Indenture
and the Serial Mortgage Notes and the Term Indenture and the Term
Mortgage Notes;
(b) engage in any business other than the issuance of
the Serial Mortgage Notes and the Term Mortgage Notes and making the
loans to the Owners in accordance with California Petroleum's charter
and by-laws;
(c) (i) commence any case, proceeding or other
action under any existing or future bankruptcy, insolvency or similar
law seeking to have an order for relief entered with respect to it,
or seeking reorganization, arrangement, adjustment, winding up,
liquidation, dissolution, composition or other relief with respect to
it or its debts, (ii) seek appointment to a receiver, trustee,
custodian or other similar official for it or any part of its assets,
(iii) make a general assignment for the benefit of creditors or (iv)
take any action in furtherance of, or consenting or acquiescing in,
any of the foregoing;
(d) create, incur, assume or suffer to exist any Lien
on any of its assets or properties or on any of the Collateral,
except for the Liens created in connection with the Serial Indenture,
the Term Indenture and the Collateral Agreement;
(e) consolidate with, or merge with or into, any
other Person or convey or transfer to any Person all or any part of
the Collateral;
(f) (i) declare or pay any dividend or other
distribution on any shares of its respective capital stock, (ii) make
any loans or advances to any Affiliate of California Petroleum or
(iii) purchase, redeem or otherwise acquire or retire for value any
shares of its respective capital stock; and
(g) make any capital contributions, advances or
loans to, or investments or purchases of capital stock in, any
Person, except for its loan to each Owner.
SECTION 3.9 Reports by Chevron. Chevron covenants:
(a) to file with the Indenture Trustee, within 15 days after
Chevron is required to file the same with the Commission, copies of
the annual reports and of the information, documents, and other
reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe)
which Chevron may be required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act, or, if Chevron is not
required to file information, documents, or reports pursuant to either
of such Sections of the Exchange Act, then to file with the Indenture
Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents, and reports which
may be required pursuant to Section 13 of the Exchange Act, or, in
respect of a security listed and registered on a national securities
exchange, as may be prescribed from time to time in such rules and
regulations;
(b) to file with the Indenture Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by
the Commission, such additional information, documents, and reports
with respect to compliance by Chevron with the conditions and
covenants provided for in this Indenture as may be required from time
to time by such rules and regulations;
(c) to transmit to the holders of the Serial Mortgage Notes
in the manner and to the extent required by Section 313(c) of the
Trust Indenture Act, within 30 days after the filing thereof with the
Indenture Trustee, such summaries of any information, documents and
reports required to be filed by Chevron pursuant to subsections (a)
and (b) of this Section 4.03 as may be required by rules and
regulations prescribed from time to time by the Commission; and
(d) furnish to the Indenture Trustee, on or before each
August, commencing in 1995, a brief certificate from the principal
executive officer, principal financial officer or principal accounting
officer of Chevron as to his or her knowledge of Chevron's compliance
with all conditions and covenants under this Serial Indenture. For
purposes of this subsection (d), such compliance shall be determined
without regard to any period of grace or requirement of notice
provided under this Indenture.
ARTICLE FOUR
REMEDIES OF THE INDENTURE TRUSTEE AND
SERIAL NOTEHOLDERS ON INDENTURE EVENT OF DEFAULT.
SECTION 4.1 Indenture Event of Default Defined; Acceleration
of Maturity; Waiver of Default. An Indenture Event of Default means any of
the following events (whatever the reason for such Indenture Event of Default
and whether it shall be voluntary or involuntary or be effected by operation
of law or pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body):
(a) any Mortgage Event of Default under a Mortgage that is a
Related Security Document shall have occurred and be continuing;
(b) default in the payment of all or any part of the principal
of or interest on any of the Serial Mortgage Notes as and when such
payment becomes due and payable either at maturity, upon any
redemption, by declaration or otherwise and the continuance of such
default for a period of two Business Days;
(c) failure on the part of California Petroleum duly to
observe or perform in any material respect any of the other
agreements or covenants on the part of California Petroleum contained
in the Serial Mortgage Notes, this Serial Indenture, the Related
Security Documents or any document or certificate delivered pursuant
thereto for a period of 30 days after the earlier of (i) actual
knowledge by California Petroleum of such failure and (ii) the date
on which written notice specifying such failure and stating that such
notice is a "Notice of Default" hereunder has been given by
registered or certified mail, return receipt requested, to California
Petroleum by the Indenture Trustee, or to California Petroleum and
the Indenture Trustee by the holders of at least 25% in aggregate
principal amount of the Serial Mortgage Notes at the time Outstanding;
(d) any representation or warranty of California Petroleum
made in this Serial Indenture, any Related Security Document or any
document or certificate delivered pursuant thereto proves to have been
inaccurate in any material respect when made, remains inaccurate in
such material respect for a period of 30 days after the earlier of
(i) actual knowledge of such inaccuracy and (ii) the date on which
written notice specifying such inaccuracy and stating that such notice
is a "Notice of Default" hereunder has been given by registered or
certified mail, return receipt requested, to California Petroleum by
the Indenture Trustee, or to California Petroleum and the Indenture
Trustee by the holders of at least 25% in aggregate principal amount
of the Serial Mortgage Notes at the time Outstanding;
(e) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of California Petroleum in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of California Petroleum or for any substantial part of its
property or ordering the winding up or liquidation of its affairs,
and such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days;
(f) California Petroleum shall commence a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief
in an involuntary case under any such law, or consent to the
appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of California
Petroleum or for any substantial part of its property, or make any
general assignment for the benefit of creditors;
(g) any of the Initial Charters is repudiated or
ceases to be in full force and effect, other than pursuant to the
terms thereof;
(h) any of the Related Security Documents is repudiated or
ceases to be in full force and effect or any of such Security
Documents ceases to give the Collateral Trustee, in any material
respect, the Liens, rights, powers and privileges purported to be
created thereby, in each case other than pursuant to the terms
thereof; or
(i) any of the Chevron Guarantees is repudiated or ceases to be
in full force and effect, other than pursuant to the terms thereof.
If an Indenture Event of Default (other than an Indenture Event
of Default specified in clause (e) or (f) above occurs and is continuing, then
and in each and every such case, unless the principal of all of the Serial
Mortgage Notes shall have already become due and payable, either the Indenture
Trustee or the holders of not less than 25% in aggregate principal amount of
the Serial Mortgage Notes then Outstanding hereunder, by notice in writing to
California Petroleum (and to the Indenture Trustee if given by the Serial
Noteholders), may declare the entire principal of all the Serial Mortgage
Notes and the interest accrued thereon, to be due and payable immediately, and
upon any such declaration the same shall become immediately due and payable.
If an Indenture Event of Default specified in clause (e) or (f) above occurs
and is continuing, then and in each and every such case, unless the principal
of all of the Serial Mortgage Notes shall have already become due and payable,
the entire principal of all the Serial Mortgage Notes and the interest accrued
thereon, shall immediately and without further act become due and payable,
without presentment, demand, protest or notice by the Indenture Trustee or any
holder of Serial Mortgage Notes, all of which are hereby waived.
This provision, however, is subject to the condition that if,
at any time after the principal of the Serial Mortgage Notes shall have been
so declared due and payable, and before any judgment or decree for the payment
of the moneys due shall have been obtained or entered as hereinafter provided,
California Petroleum shall pay or shall deposit with the Indenture Trustee a
sum sufficient to pay all matured installments of interest upon all the Serial
Mortgage Notes and the principal of any and all Serial Mortgage Notes which
shall have become due otherwise than by acceleration (with interest upon such
principal and, to the extent that payment of such interest is enforceable under
applicable law, on overdue installments of interest, at the same rate for each
Serial Mortgage Note as the rate of interest specified in such Serial Mortgage
Note, to the date of such payment or deposit) and such amount as shall be
sufficient to cover reasonable compensation to the Indenture Trustee and each
predecessor Indenture Trustee, their respective agents, attorneys and counsel,
and all other expenses and liabilities incurred, and all advances made, by the
Indenture Trustee and each predecessor Indenture Trustee except as a result of
negligence or bad faith, and if any and all Events of Default under this
Serial Indenture, other than the non-payment of the principal of Serial
Mortgage Notes which shall have become due by acceleration, shall have been
cured, waived or otherwise remedied as provided herein -- then and in every
such case the holders of a majority in aggregate principal amount of the Serial
Mortgage Notes then Outstanding, by written notice to California Petroleum and
to the Indenture Trustee, may waive all defaults and rescind and annul such
declaration and its consequences, but no such waiver or rescission and
annulment shall extend to or shall affect any subsequent default or shall
impair any right consequent thereon.
SECTION 4.2 Collection of Indebtedness by Indenture Trustee;
Indenture Trustee May Prove Debt. California Petroleum covenants that if an
Indenture Event of Default specified in clause (b) of Section 4.1 occurs and is
continuing, then upon demand of the Indenture Trustee, California Petroleum
will pay to the Indenture Trustee for the benefit of the holders of the Serial
Mortgage Notes the whole amount that then shall have become due and payable on
all such Serial Mortgage Notes for principal or interest, as the case may be
(with interest to the date of such payment upon the overdue principal and, to
the extent that payment of such interest is enforceable under applicable law,
on overdue installments of interest at the same rate for each Serial Mortgage
Note as the rate of interest specified in such Serial Mortgage Note); and in
addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including reasonable compensation to the
Indenture Trustee and each predecessor Indenture Trustee, their respective
agents, attorneys and counsel, and any expenses and liabilities incurred, and
all advances made, by the Indenture Trustee and each predecessor Indenture
Trustee except as a result of its negligence or bad faith.
Until such demand is made by the Indenture Trustee, California
Petroleum may pay the principal of and interest on the Serial Mortgage Notes
to the registered holders, whether or not the Serial Mortgage Notes be overdue.
In case California Petroleum shall fail forthwith to pay such
amounts upon such demand, the Indenture Trustee, in its own name and as
trustee of an express trust, shall be entitled and empowered to institute any
action or proceedings at law or in equity for the collection of the sums so
due and unpaid, and may prosecute any such action or proceedings to judgment
or final decree, and may enforce any such judgment or final decree against
California Petroleum or other obligor upon the Serial Mortgage Notes and
collect in the manner provided by law out of the property of California
Petroleum or other obligor upon the Serial Mortgage Notes, wherever situated,
the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings relative to
California Petroleum or any other obligor upon the Serial Mortgage Notes under
Title 11 of the United States Code or any other applicable Federal or state
bankruptcy, insolvency or other similar law, or in case a receiver, assignee
or trustee in bankruptcy or reorganization, liquidator, sequestrator or
similar official shall have been appointed for or taken possession of
California Petroleum or its property or such other obligor, or in case of any
other comparable judicial proceedings relative to California Petroleum or
other obligor upon the Serial Mortgage Notes, or to the creditors or property
of California Petroleum or such other obligor, the Indenture Trustee,
irrespective of whether the principal of the Serial Mortgage Notes shall then
be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Indenture Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered,
by intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount
of principal and interest owing and unpaid in respect of the Serial
Mortgage Notes, and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Indenture
Trustee (including any claim for reasonable compensation to the
Indenture Trustee and each predecessor Indenture Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all
expenses and liabilities incurred, and all advances made, by the
Indenture Trustee and each predecessor Indenture Trustee, except as a
result of negligence or bad faith) and of the Serial Noteholders
allowed in any judicial proceedings relative to California Petroleum
or other obligor upon the Serial Mortgage Notes, or to the creditors
or property of California Petroleum or such other obligor,
(b) unless prohibited by applicable law and regulations, to
vote on behalf of the holders of the Serial Mortgage Notes in any
election of a trustee or a standby trustee in arrangement,
reorganization, liquidation or other bankruptcy or insolvency
proceedings or person performing similar functions in comparable
proceedings, and
(c) to collect and receive any moneys or other property
payable or deliverable on any such claims, and to distribute all
amounts received with respect to the claims of the Serial Noteholders
and of the Indenture Trustee on their behalf; and any trustee,
receiver, or liquidator, custodian or other similar official is
hereby authorized by each of the Serial Noteholders to make payments
to the Indenture Trustee, and, in the event that the Indenture
Trustee shall consent to the making of payments directly to the
Serial Noteholders, to pay to the Indenture Trustee such amounts as
shall be sufficient to cover reasonable compensation to the Indenture
Trustee, each predecessor Indenture Trustee and their respective
agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee except as a result of negligence or bad
faith.
Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Serial Noteholder any plan or reorganization, arrangement,
adjustment or composition affecting the Serial Mortgage Notes or the rights of
any Holder thereof, or to authorize the Indenture Trustee to vote in respect
of the claim of any Serial Noteholder in any such proceeding except, as
aforesaid, to vote for the election of a trustee in bankruptcy or similar
person.
All rights of action and of asserting claims under this Serial
Indenture, or under any of the Serial Mortgage Notes, may be enforced by the
Indenture Trustee without the possession of any of the Serial Mortgage Notes
or the production thereof on any trial or other proceedings relative thereto,
and any such action or proceedings instituted by the Indenture Trustee shall
be brought in its own name as trustee of an express trust, and any recovery of
judgment, subject to the payment of the expenses, disbursements and
compensation of the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents and attorneys, shall be for the ratable benefit of the
holders of the Serial Mortgage Notes.
In any proceedings brought by the Indenture Trustee (and also
any proceedings involving the interpretation of any provision of this Serial
Indenture to which the Indenture Trustee shall be a party) the Indenture
Trustee shall be held to represent all the holders of the Serial Mortgage
Notes, and it shall not be necessary to make any holders of the Serial
Mortgage Notes parties to any such proceedings.
SECTION 4.3 Application of Proceeds. Any moneys collected by
the Indenture Trustee pursuant to this Article shall be applied in the
following order at the date or dates fixed by the Indenture Trustee and, in
case of the distribution of such moneys on account of principal or interest,
upon presentation of the several Serial Mortgage Notes and stamping (or
otherwise noting) thereon the payment, or issuing Serial Mortgage Notes in
reduced principal amounts in exchange for the presented Serial Mortgage Notes
if only partially paid, or upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses, including
reasonable compensation to the Indenture Trustee and each predecessor
Indenture Trustee and their respective agents and attorneys and of all
expenses and liabilities incurred, and all advances made, by the
Indenture Trustee and each predecessor Indenture Trustee except as a
result of negligence or bad faith;
SECOND: In case the principal of the Serial Mortgage Notes
shall not have become and be then due and payable, to the payment of
interest in default in the order of the maturity of the installments
of such interest, with interest (to the extent that such interest has
been collected by the Indenture Trustee) upon the overdue
installments of interest at the same rate for each Serial Mortgage
Note as the rate of interest specified in such Serial Mortgage Note,
such payments to be made ratably to the persons entitled thereto,
without discrimination or preference;
THIRD: In case the principal of the Serial Mortgage Notes
shall have become and shall be then due and payable, to the payment
of the whole amount then owing and unpaid upon all the Serial
Mortgage Notes for principal and interest, with interest upon the
overdue principal, and (to the extent that such interest has been
collected by the Indenture Trustee) upon overdue installments of
interest at the same rate for each Serial Mortgage Note as the rate
of interest specified in such Serial Mortgage Note; and in case such
moneys shall be insufficient to pay in full the whole amount so due
and unpaid upon the Serial Mortgage Notes, then to the payment of
such principal and interest, without preference or priority of
principal over interest, or of interest over principal, or of any
installment of interest over any other installment of interest, or of
any Serial Mortgage Note over any other Serial Mortgage Note, ratably
to the aggregate of such principal and accrued and unpaid interest;
and
FOURTH: To the payment of the remainder, if any, to California
Petroleum or any other person lawfully entitled thereto.
SECTION 4.4 Suits for Enforcement. In case an Indenture Event
of Default has occurred, has not been waived and is continuing, the Indenture
Trustee may in its discretion proceed to protect and enforce the rights vested
in it by this Serial Indenture by such appropriate judicial proceedings as the
Indenture Trustee shall deem most effectual to protect and enforce any of such
rights, either at law or in equity or in bankruptcy or otherwise, whether for
the specific enforcement of any covenant or agreement contained in this Serial
Indenture or in aid of the exercise of any power granted in this Serial
Indenture or to enforce any other legal or equitable right vested in the
Indenture Trustee by this Serial Indenture or by law.
SECTION 4.5 Restoration of Rights on Abandonment of
Proceedings. In case the Indenture Trustee shall have proceeded to enforce
any right under this Serial Indenture and such proceedings shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely to the Indenture Trustee, then and in every such case California
Petroleum and the Indenture Trustee shall be restored respectively to their
former positions and rights hereunder, and all rights, remedies and powers of
California Petroleum, the Indenture Trustee and the Serial Noteholders shall
continue as though no such proceedings had been taken.
SECTION 4.6 Limitations on Suits by Serial Noteholders. No
holder of any Serial Mortgage Note shall have any right by virtue or by
availing of any provision of this Serial Indenture to institute any action or
proceeding at law or in equity or in bankruptcy or otherwise upon or under or
with respect to this Serial Indenture, or for the appointment of a trustee,
receiver, liquidator, custodian or other similar official or for any other
remedy hereunder, unless such holder previously shall have given to the
Indenture Trustee written notice of default and of the continuance thereof, as
hereinbefore provided, and unless also the holders of not less than 25% in
aggregate principal amount of the Serial Mortgage Notes then Outstanding shall
have made written request upon the Indenture Trustee to institute such action
or proceedings in its own name as trustee hereunder and shall have offered to
the Indenture Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby and the
Indenture Trustee for 60 days after its receipt of such notice, request and
offer of indemnity shall have failed to institute any such action or
proceedings and no direction inconsistent with such written request shall have
been given to the Indenture Trustee pursuant to Section 4.8; it being
understood and intended, and being expressly covenanted by the taker and
holder of every Serial Mortgage Note with every other taker and holder and the
Indenture Trustee, that no one or more holders of Serial Mortgage Notes shall
have any right in any manner whatever by virtue or by availing of any
provision of this Serial Indenture to affect, disturb or prejudice the rights
of any other holder of Serial Mortgage Notes, or to obtain or seek to obtain
priority over or preference to any other such holder or to enforce any right
under this Serial Indenture, except in the manner herein provided and for the
equal, ratable and common benefit of all holders of Serial Mortgage Notes.
For the protection and enforcement of the provisions of this Section, each and
every Serial Noteholder and the Indenture Trustee shall be entitled to such
relief as can be given either at law or in equity.
SECTION 4.7 Powers and Remedies Cumulative; Delay or Omission
Not Waiver of Default. Except as provided in Section 2.6, no right or remedy
herein conferred upon or reserved to the Indenture Trustee or to the Serial
Noteholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
No delay or omission of the Indenture Trustee or of any holder
of any of the Serial Mortgage Notes to exercise any right or power accruing
upon any Indenture Event of Default occurring and continuing as aforesaid shall
impair any such right or power or shall be construed to be a waiver of any
such Indenture Event of Default or an acquiescence therein; and, subject to
Section 4.6, every power and remedy given by this Serial Indenture or by law to
the Indenture Trustee or to the Serial Noteholders may be exercised from time
to time, and as often as shall be deemed expedient, by the Indenture Trustee
or by the Serial Noteholders.
SECTION 4.8 Control by Serial Noteholders. The holders of a
majority in aggregate principal amount of the Serial Mortgage Notes at the
time Outstanding shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Indenture Trustee,
or exercising any trust or power conferred on the Indenture Trustee by this
Serial Indenture; provided that such direction shall not be otherwise than in
accordance with law and the provisions of this Serial Indenture and provided
further that (subject to the provisions of Section 5.1) the Indenture Trustee
shall have the right to decline to follow any such direction if the Indenture
Trustee, being advised by counsel, shall determine that the action or
proceeding so directed may not lawfully be taken or if the Indenture Trustee
in good faith by its board of directors, the executive committee, or a trust
committee of directors or responsible officers of the Indenture Trustee shall
determine that the action or proceedings so directed would involve the
Indenture Trustee in personal liability or if the Indenture Trustee in good
faith shall so determine that the actions or forebearances specified in or
pursuant to such direction shall be unduly prejudicial to the interests of
holders of the Serial Mortgage Notes not joining in the giving of said
direction, it being understood that (subject to Section 5.1) the Indenture
Trustee shall have no duty to ascertain whether or not such actions or
forebearances are unduly prejudicial to such holders.
Nothing in this Serial Indenture shall impair the right of the
Indenture Trustee in its discretion to take any action deemed proper by the
Indenture Trustee and which is not inconsistent with such direction by Serial
Noteholders.
SECTION 4.9 Waiver of Past Defaults. Prior to the declaration
of the maturity of the Serial Mortgage Notes as provided in Section 4.1, the
holders of a majority in aggregate principal amount of the Serial Mortgage
Notes at the time Outstanding may on behalf of the holders of all the Serial
Mortgage Notes waive any past default or Indenture Event of Default hereunder
and its consequences, except a default (a) in the payment of principal of or
interest on any of the Serial Mortgage Notes or (b) in respect of a covenant
or provision hereof which cannot be modified or amended without the consent of
the holder of each Serial Mortgage Note affected. In the case of any such
waiver, California Petroleum, the Indenture Trustee and the holders of the
Serial Mortgage Notes shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
Upon any such waiver, such default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Indenture Event of
Default arising therefrom shall be deemed to have been cured, and not to have
occurred for every purpose of this Serial Indenture; but no such waiver shall
extend to any subsequent or other default or Indenture Event of Default or
impair any right consequent thereon.
SECTION 4.10 Enforcement Notice. (a) If any Indenture Event
of Default occurs and is continuing and if such Indenture Event of Default is
actually known by a Responsible Officer of the Indenture Trustee charged with
administration of this Serial Indenture, the Indenture Trustee shall mail to
the Collateral Trustee and each holder of a Serial Mortgage Note, in the
manner and to the extent provided in Section 313(c) of the Trust Indenture Act,
notice of each Indenture Event of Default within 90 days after it occurs (an
"Enforcement Notice"), unless such Indenture Event of Default has been cured;
provided that, except in the case of a default in the payment of the principal
of or interest on any Serial Mortgage Note, the Indenture Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors or Responsible
Officers of the Indenture Trustee in good faith determine that the withholding
of such notice is in the interest of the holders of the Serial Mortgage Notes.
(b) So long as an Enforcement Notice is in effect, the
Collateral Trustee shall exercise the rights and remedies respectively
provided in the Collateral Agreement and the Related Security Documents
subject to the direction of the Applicable Secured Parties (as defined in the
Collateral Agreement) as provided herein and therein. The Collateral Trustee
is not empowered to exercise any remedy under the Collateral Agreement or any
of the Related Security Document unless an Enforcement Notice is in effect.
(c) Except as otherwise provided by Section 4.10(e), an
Enforcement Notice shall become effective upon receipt thereof by the
Collateral Trustee. An Enforcement Notice, once effective, shall remain in
effect unless and until it is canceled as provided in Section 4.10(d) or
deemed canceled as provided in Section 4.10(e).
(d) If the Indenture Trustee has given an Enforcement Notice,
the Indenture Trustee shall be required to cancel such Enforcement Notice
under the circumstances set forth in Section 4.1.
(e) Notwithstanding anything to the contrary contained in this
Section 4.10, if the Collateral Trustee and the Indenture Trustee are the same
Person, the Indenture Trustee shall not be required to deliver a notice to the
Collateral Trustee in order for an Enforcement Notice to become effective or
to be canceled. In any such case, an Enforcement Notice shall, for all
purposes of the Collateral Agreement the Related Security Documents, (i) be
deemed to have been delivered and to have become effective immediately upon
the Indenture Trustee being charged under this Section 4.10 with knowledge
that (x) a Serial Mortgage Note has not been paid in full at the stated final
maturity thereof or (y) an Indenture Event of Default has occurred under the
terms of this Serial Indenture, and (ii) shall be deemed to have been canceled
at such time as the Indenture Trustee would have been required to deliver a
notice of cancellation under Section 4.1 pursuant to this Section 4.10 were it
not also the Collateral Trustee.
(f) The Collateral Trustee shall notify California Petroleum,
Chevron and the Indenture Trustee of the effectiveness or the cancellation of
any Enforcement Notice within three Business Days thereof; provided that the
Collateral Trustee shall not be required to so notify the Indenture Trustee if
the Indenture Trustee and the Collateral Trustee are the same Person.
The Indenture Trustee shall not be deemed to have knowledge of
any Default or Indenture Event of Default except (i) any Indenture Event of
Default occurring pursuant to Section 4.1(b) or (ii) any Default or Indenture
Event of Default of which a Responsible Officer of the Indenture Trustee
charged with administration of this Serial Indenture shall have received
written notification or obtained actual knowledge.
ARTICLE FIVE
CONCERNING THE INDENTURE TRUSTEE.
SECTION 5.1 Duties and Responsibilities of the Indenture
Trustee; During Default; Prior to Default. The Indenture Trustee, prior to
the occurrence of an Indenture Event of Default and after the curing or
waiving of all Indenture Events of Default which may have occurred, undertakes
to perform such duties and only such duties as are specifically set forth in
this Serial Indenture. In case an Indenture Event of Default has occurred
(which has not been cured or waived) the Indenture Trustee shall exercise such
of the rights and powers vested in it by this Serial Indenture, and use the
same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
No provision of this Serial Indenture shall be construed to
relieve the Indenture Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that
(a) prior to the occurrence of an Indenture Event of Default
and after the curing or waiving of all such Indenture Events of
Default which may have occurred:
(i) the duties and obligations of the Indenture Trustee
shall be determined solely by the express provisions of this
Serial Indenture, and the Indenture Trustee shall not be liable
except for the performance of such duties and obligations as
are specifically set forth in this Serial Indenture, and no
implied covenants or obligations shall be read into this Serial
Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on the part of the
Indenture Trustee, the Indenture Trustee may conclusively rely,
as to the truth of the statements and the correctness of the
opinions expressed therein, upon any statements, certificates
or opinions furnished to the Indenture Trustee and conforming
to the requirements of this Serial Indenture; but in the case
of any such statements, certificates or opinions which by any
provision hereof are specifically required to be furnished to
the Indenture Trustee, the Indenture Trustee shall be under a
duty to examine the same to determine whether or not they
conform to the requirements of this Serial Indenture;
(b) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a responsible officer or responsible
officers of the Indenture Trustee, unless it shall be proved that the
Indenture Trustee was negligent in ascertaining the pertinent facts;
and
(c) the Indenture Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the holders of not less than a
majority in principal amount of the Serial Mortgage Notes at the time
Outstanding relating to the time, method and place of conducting any
proceeding for any remedy available to the Indenture Trustee, or
exercising any trust or power conferred upon the Indenture Trustee,
under this Serial Indenture.
None of the provisions contained in this Serial Indenture shall
require the Indenture Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers, if there shall be reasonable
ground for believing that the repayment of such funds or adequate indemnity
against such liability is not reasonably assured to it.
This Section 5.1 is in furtherance of and subject to Sections
315 and 316 of the Trust Indenture Act.
SECTION 5.2 Certain Rights of the Indenture Trustee. In
furtherance of and subject to the Trust Indenture Act, and subject to Section
5.1:
(a) the Indenture Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution, Officers'
Certificate or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, bond, debenture, note,
coupon, security or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(b) any request, direction, order or demand of California
Petroleum mentioned herein shall be sufficiently evidenced by an
Officers' Certificate (unless other evidence in respect thereof be
herein specifically prescribed); and any resolution of the Board of
Directors may be evidenced to the Indenture Trustee by a copy thereof
certified by the secretary or an assistant secretary of California
Petroleum;
(c) the Indenture Trustee may consult with counsel and any
advice or Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted to
be taken by it hereunder in good faith and in accordance with such
advice or Opinion of Counsel;
(d) the Indenture Trustee shall be under no obligation to
exercise any of the trusts or powers vested in it by this Serial
Indenture at the request, order or direction of any of the Serial
Noteholders pursuant to the provisions of this Serial Indenture,
unless such Serial Noteholders shall have offered to the Indenture
Trustee reasonable security or indemnity against the costs, expenses
and liabilities which might be incurred therein or thereby;
(e) the Indenture Trustee shall not be liable for any action
taken or omitted by it in good faith and believed by it to be
authorized or within the discretion, rights or powers conferred upon
it by this Serial Indenture;
(f) prior to the occurrence of an Indenture Event of Default
hereunder and after the curing or waiving of all Indenture Events of
Default, the Indenture Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, appraisal, bond, debenture, note, coupon,
security, or other paper or document unless requested in writing so
to do by the holders of not less than a majority in aggregate
principal amount of the Serial Mortgage Notes then Outstanding;
provided that, if the payment within a reasonable time to the
Indenture Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion
of the Indenture Trustee, not reasonably assured to the Indenture
Trustee by the security afforded to it by the terms of this Serial
Indenture, the Indenture Trustee may require reasonable indemnity
against such expenses or liabilities as a condition to proceeding; the
reasonable expenses of every such examination shall be paid by
California Petroleum or, if paid by the Indenture Trustee or any
predecessor trustee, shall be repaid by California Petroleum upon
demand; and
(g) the Indenture Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or
by or through agents or attorneys not regularly in its employ and the
Indenture Trustee shall not be responsible for any misconduct or
negligence on the part of any such agent or attorney appointed with
due care by it hereunder.
SECTION 5.3 Indenture Trustee Not Responsible for Recitals,
Disposition of Serial Mortgage Notes or Application of Proceeds Thereof. The
recitals contained herein and in the Serial Mortgage Notes, except the
Indenture Trustee's certificates of authentication, shall be taken as the
statements of California Petroleum, and the Indenture Trustee assumes no
responsibility for the correctness of the same. The Indenture Trustee makes
no representation as to the validity or sufficiency of this Serial Indenture
or of the Serial Mortgage Notes. The Indenture Trustee shall not be
accountable for the use or application by California Petroleum of any of the
Serial Mortgage Notes or of the proceeds thereof.
SECTION 5.4 Indenture Trustee and Agents May Hold Serial
Mortgage Notes; Collections, etc. The Indenture Trustee or any agent of
California Petroleum or the Indenture Trustee, in its individual or any other
capacity, may become the owner or pledgee of Serial Mortgage Notes with the
same rights it would have if it were not the Indenture Trustee or such agent
and may otherwise deal with California Petroleum and receive, collect, hold
and retain collections from California Petroleum with the same rights it would
have if it were not the Indenture Trustee or such agent.
SECTION 5.5 Moneys Held by Indenture Trustee. Subject to the
provisions of Section 9.4 hereof, all moneys received by the Indenture Trustee
shall, until used or applied as herein provided, be held in trust for the
purposes for which they were received, but need not be segregated from other
funds except to the extent required by mandatory provisions of law. Neither
the Indenture Trustee nor any agent of California Petroleum or the Indenture
Trustee shall be under any liability for interest on any moneys received by it
hereunder.
SECTION 5.6 Compensation and Expenses. (a) California
Petroleum shall on demand pay or reimburse the Indenture Trustee for (i)
reasonable compensation to the Indenture Trustee, to the extent permitted by
law (which shall not be limited by any provision of law in regard to
compensation of fiduciaries or of a trustee of an express trust), for its
services hereunder and (ii) all of the reasonable costs and expenses of the
Indenture Trustee (including, without limitation, the reasonable compensation
and expenses and disbursements of its counsel and of all agents and other
persons not regularly in its employ) (A) in connection with the preparation,
execution and delivery of this Serial Indenture, the Collateral Agreement or
the other Security Documents, any waiver or consent thereunder, any
modification or termination thereof, or any Default or alleged Default; (B) if
an Indenture Event of Default occurs, in connection with such Indenture Event
of Default and collection, bankruptcy, insolvency and other enforcement
proceedings relating thereto; (C) in connection with the administration or
protection of the Trust Estate, the sale or other disposition of any
Collateral or the preservation, protection or defense of the Indenture
Trustee's or the Collateral Trustee's rights under the Security Documents or
in and to the Trust Estate, whether pursuant to the Collateral Agreement or
pursuant hereto; or (D) in connection with any removal of the Indenture Trustee
pursuant to subsection 5.9(a) hereof or of the Collateral Trustee pursuant to
subsection 6.07(a) of the Collateral Agreement.
(b) California Petroleum shall indemnify and hold harmless the
Indenture Trustee from and against any and all liabilities, obligations,
losses, damages, penalties, judgments, actions, suits, proceedings, reasonable
costs and expenses (including reasonable fees and disbursements of counsel) of
any kind whatsoever which may be incurred by the Indenture Trustee in
connection with any investigative, administrative or judicial proceeding
(whether or not such indemnified party is designated a party to such
proceeding) relating to this Serial Indenture, the Serial Mortgage Notes, the
Trust Estate, the Collateral or the Security Documents, provided that the
Indenture Trustee shall not have the right to be indemnified hereunder for its
own negligence or bad faith as determined by a court of competent
jurisdiction. In any suit, proceeding or action brought by the Indenture
Trustee under or with respect to any contract, agreement, interest or
obligation constituting part of the Collateral for any sum owing thereunder or
hereunder, or to enforce any provisions thereof, California Petroleum agrees
to save, indemnify and keep the Indenture Trustee harmless from and against
all expense, loss or damage suffered by reason of any defense, setoff,
counterclaim, recoupment or reduction of liability whatsoever of California
Petroleum thereunder, arising out of a breach by California Petroleum of any
obligation thereunder or arising out of any other agreement, indebtedness or
liability at any time owing to, from or in favor of California Petroleum or
its successors, and all such obligations of California Petroleum shall be and
remain enforceable against and only against California Petroleum and shall not
be enforceable against the Indenture Trustee.
(c) In addition to, but without duplication of, its
obligations under subsection (b) above, California Petroleum shall indemnify
and hold harmless the Indenture Trustee from and against any and all losses,
damages and expenses incurred by the Indenture Trustee as a result of any oil
or other environmental damage resulting from the operation of any Vessel,
including, without limitation, any liability under the Oil Pollution Act of
1990, as amended, or the laws of any other jurisdiction relating to oil spills.
(d) The agreements in this Section 5.6 shall survive the
termination of the other provisions of this Serial Indenture Agreement but
shall not be secured by any Lien on the Collateral.
SECTION 5.7 Right of Indenture Trustee to Rely on Officers'
Certificate, etc. Subject to Sections 5.1 and 5.2, whenever in the
administration of the trusts of this Serial Indenture the Indenture Trustee
shall deem it necessary or desirable that a matter be proved or established
prior to taking or suffering or omitting any action hereunder, such matter
(unless other evidence in respect thereof be herein specifically prescribed)
may, in the absence of negligence or bad faith on the part of the Indenture
Trustee, be deemed to be conclusively proved and established by an Officers'
Certificate delivered to the Indenture Trustee, and such certificate, in the
absence of negligence or bad faith on the part of the Indenture Trustee, shall
be full warrant to the Indenture Trustee for any action taken, suffered or
omitted by it under the provisions of this Serial Indenture upon the faith
thereof.
SECTION 5.8 Persons Eligible for Appointment as Indenture
Trustee. The Indenture Trustee hereunder shall at all times be a bank or
trust company in good standing, having power to act as Indenture Trustee
hereunder and which is eligible to do so within the provisions of Section
310(a) of the Trust Indenture Act, incorporated under the laws of the United
States of America or any State thereof or the District of Columbia and having
its principal corporate trust office within the 48 contiguous States and shall
also have capital, surplus and undivided profits of not less than $10,000,000,
if there be such an institution with such capital, surplus and undivided
profits willing, qualified and able to accept the trust hereunder upon
reasonable or customary terms.
SECTION 5.9 Resignation and Removal; Appointment of Successor
Indenture Trustee. (a) The Indenture Trustee may at any time resign by
giving written notice of resignation to California Petroleum, Chevron, the
Collateral Trustee and the Term Indenture Trustee and by mailing notice
thereof by first-class mail to holders of Serial Mortgage Notes at their last
addresses as they shall appear on the Serial Mortgage Note register. Upon
receiving such notice of resignation (i) California Petroleum, with the
consent of Chevron, if no Enforcement Notice is then in effect, or (ii) the
holders of a majority in aggregate principal amount of Serial Mortgage Notes,
if an Enforcement Notice is then in effect, shall promptly appoint a successor
trustee by an instrument in writing delivered to the resigning Indenture
Trustee, the successor trustee, Chevron, California Petroleum and Term
Indenture Trustee. If no successor trustee shall have been so appointed and
have accepted appointment within 30 days after the mailing of such notice of
resignation, the resigning trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee, or Chevron,
California Petroleum, the Collateral Trustee or any Serial Noteholder who has
been a bona fide holder of a Serial Mortgage Note or Serial Mortgage Notes for
at least six months may, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a successor trustee.
Such court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Indenture Trustee shall fail to comply with the
provisions of Section 310(b) of the Trust Indenture Act after written
request therefor by California Petroleum or by any Serial Noteholder
who has been a bona fide holder of a Serial Mortgage Note or Serial
Mortgage Notes for at least six months; or
(ii) the Indenture Trustee shall cease to be eligible in
accordance with the provisions of Section 5.8 and shall fail to
resign after written request therefor by California Petroleum or by
any such Serial Noteholder; or
(iii) the Indenture Trustee shall become incapable of acting,
or shall be adjudged a bankrupt or insolvent, or a receiver or
liquidator of the Indenture Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the
Indenture Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any such case (x) California Petroleum, with the consent of Chevron,
if no Enforcement Notice is then in effect, or (y) the holders of a majority
in aggregate principal amount of Serial Mortgage Notes, if an Enforcement
Notice is then in effect, may remove the Indenture Trustee and appoint a
successor trustee by an instrument in writing delivered to the Indenture
Trustee so removed, the successor trustee, Chevron, the Collateral Trustee and
the Term Indenture Trustee, or, subject to Section 315(e) of the Trust Serial
Indenture Act, Chevron, the Collateral Trustee or any Serial Noteholder who
has been a bona fide holder of a Serial Mortgage Note or Serial Mortgage Notes
for at least six months may on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Indenture Trustee and the appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Indenture Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of
the Serial Mortgage Notes at the time Outstanding may at any time remove the
Indenture Trustee and appoint a successor trustee by delivering to the
Indenture Trustee so removed, to the successor trustee so appointed, to
California Petroleum, Chevron, the Collateral Trustee and the Term Indenture
Trustee, the evidence provided for in Section 6.1 of the action in that regard
taken by the Serial Noteholders.
(d) Any resignation or removal of the Indenture Trustee and
any appointment of a successor trustee pursuant to any of the provisions of
this Section 5.9 shall become effective upon acceptance of appointment by the
successor trustee as provided in Section 5.10.
SECTION 5.10 Acceptance of Appointment by Successor Indenture
Trustee. Any successor indenture trustee appointed as provided in Section 5.9
shall execute and deliver to California Petroleum, Chevron, the Collateral
Trustee, to its predecessor indenture trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor indenture trustee shall become effective and such successor
indenture trustee, without any further act, deed or conveyance, shall become
vested with all rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as trustee herein; but,
nevertheless, on the written request of California Petroleum, Chevron, or of
the successor indenture trustee, upon payment of its charges then unpaid, the
indenture trustee ceasing to act shall, subject to Section 9.4, pay over to
the successor trustee all moneys at the time held by it hereunder and shall
execute and deliver an instrument transferring to such successor trustee all
such rights, powers, duties and obligations. Upon request of any such
successor trustee, California Petroleum and Chevron shall execute any and all
instruments in writing for more fully and certainly vesting in and confirming
to such successor trustee all such rights and powers. Any indenture trustee
ceasing to act shall, nevertheless, retain a prior claim upon all property or
funds held or collected by such indenture trustee to secure any amounts then
due it pursuant to the provisions of Section 5.6.
Upon acceptance of appointment by a successor indenture trustee
as provided in this Section 5.10, California Petroleum shall mail notice
thereof by first-class mail to the holders of Serial Mortgage Notes at their
last addresses as they shall appear in the Serial Mortgage Note register. If
the acceptance of appointment is substantially contemporaneous with the
resignation, then the notice called for by the preceding sentence may be
combined with the notice called for by Section 5.9. If California Petroleum
fails to mail such notice within 10 days after acceptance of appointment by
the successor indenture trustee, the successor indenture trustee shall cause
such notice to be mailed at the expense of California Petroleum.
SECTION 5.11 Merger, Conversion, Consolidation or Succession
to Business of Indenture Trustee. Any corporation into which the Indenture
Trustee may be merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or consolidation to
which the Indenture Trustee shall be a party, or any corporation succeeding to
the corporate trust business of the Indenture Trustee, shall be the successor
of the Indenture Trustee hereunder, provided that such corporation shall be
eligible under the provisions of Section 5.8, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
In case at the time such successor to the Indenture Trustee
shall succeed to the trusts created by this Serial Indenture any of the Serial
Mortgage Notes shall have been authenticated but not delivered, any such
successor to the Indenture Trustee may adopt the certificate of authentication
of any predecessor Indenture Trustee and deliver such Serial Mortgage Notes so
authenticated; and, in case at that time any of the Serial Mortgage Notes
shall not have been authenticated, any successor to the Indenture Trustee may
authenticate such Serial Mortgage Notes either in the name of any predecessor
hereunder or in the name of the successor Indenture Trustee; and in all such
cases such certificate shall have the full force which it is anywhere in the
Serial Mortgage Notes or in this Serial Indenture provided that the
certificate of the Indenture Trustee shall have; provided, that the right to
adopt the certificate of authentication of any predecessor Indenture Trustee
or to authenticate Serial Mortgage Notes in the name of any predecessor
Indenture Trustee shall apply only to its successor or successors by merger,
conversion or consolidation.
ARTICLE SIX
CONCERNING THE SERIAL NOTEHOLDERS.
SECTION 6.1 Evidence of Action Taken by Serial Noteholders.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Serial Indenture to be given or taken by Serial
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Serial Noteholders in person or by
agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Indenture Trustee. Proof of execution of any
instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Serial Indenture and (subject to Sections 5.1 and 5.2)
conclusive in favor of the Indenture Trustee and California Petroleum, if made
in the manner provided in this Article.
SECTION 6.2 Proof of Execution of Instruments and of Holding
of Serial Mortgage Notes; Record Date. Subject to Sections 5.1 and 5.2, the
execution of any instrument by a Serial Noteholder or his agent or proxy may
be proved in accordance with such reasonable rules and regulations as may be
prescribed by the Indenture Trustee or in such manner as shall be satisfactory
to the Indenture Trustee. The holding of Serial Mortgage Notes shall be
proved by the Serial Mortgage Note register or by a certificate of the
registrar thereof. California Petroleum may set a record date for purposes of
determining the identity of holders of Serial Mortgage Notes entitled to vote
or consent to any action referred to in Section 6.1, which record date may be
set at any time or from time to time by notice to the Indenture Trustee, for
any date or dates (in the case of any adjournment or resolicitation) not more
than 60 days nor less than five days prior to the proposed date of such vote
or consent, and thereafter, notwithstanding any other provisions hereof, only
holders of Serial Mortgage Notes of record on such record date shall be
entitled to so vote or give such consent or to withdraw such vote or consent.
SECTION 6.3 Holders to Be Treated as Owners. California
Petroleum, Chevron, the Indenture Trustee and any agent of California
Petroleum, Chevron or the Indenture Trustee may deem and treat the person in
whose name any Serial Mortgage Note shall be registered upon the Serial
Mortgage Note register as the absolute owner of such Serial Mortgage Note
(whether or not such Serial Mortgage Note shall be overdue and notwithstanding
any notation of ownership or other writing thereon) for the purpose of
receiving payment of or on account of the principal of and, subject to the
provisions of this Serial Indenture, interest on such Serial Mortgage Note and
for all other purposes; and neither California Petroleum nor Chevron nor the
Indenture Trustee nor any agent of California Petroleum, Chevron or the
Indenture Trustee shall be affected by any notice to the contrary. All such
payments so made to any such person, or upon his order, shall be valid, and,
to the extent of the sum or sums so paid, effectual to satisfy and discharge
the liability for moneys payable upon any such Serial Mortgage Note.
SECTION 6.4 Serial Mortgage Notes Deemed Not Outstanding. In
determining whether the holders of the requisite aggregate principal amount of
Serial Mortgage Notes have concurred in any direction, consent or waiver under
this Serial Indenture, Serial Mortgage Notes which are owned by California
Petroleum or any Affiliate thereof, or Chevron, or any Affiliate thereof,
shall be disregarded and deemed not to be Outstanding for the purpose of any
such determination, except that for the purpose of determining whether the
Indenture Trustee shall be protected in relying on any such direction, consent
or waiver only Serial Mortgage Notes which the Indenture Trustee knows are so
owned shall be so disregarded. In case of a dispute as to such right, the
advice of counsel shall be full protection in respect of any decision made by
the Indenture Trustee in accordance with such advice. Upon request of the
Indenture Trustee, California Petroleum or Chevron shall furnish to the
Indenture Trustee promptly an Officers' Certificate listing and identifying
all Serial Mortgage Notes, if any, known by California Petroleum or Chevron,
as the case might be, to be owned or held by or for the account of any of the
above-described persons; and, subject to Sections 5.1 and 5.2, the Indenture
Trustee shall be entitled to accept such Officers' Certificate as conclusive
evidence of the facts therein set forth and of the fact that all Serial
Mortgage Notes not listed therein are Outstanding for the purpose of any such
determination.
SECTION 6.5 Right of Revocation of Action Taken. At any time
prior to (but not after) the evidencing to the Indenture Trustee, as provided
in Section 6.1, of the taking of any action by the holders of the percentage
in aggregate principal amount of the Serial Mortgage Notes specified in this
Serial Indenture in connection with such action, any holder of a Serial
Mortgage Note the serial number of which is shown by the evidence to be
included among the serial numbers of the Serial Mortgage Notes the holders of
which have consented to such action may, by filing written notice at the
Corporate Trust Office and upon proof of holding as provided in this Article,
revoke such action so far as concerns such Serial Mortgage Note. Except as
aforesaid any such action taken by the holder of any Serial Mortgage Note
shall be conclusive and binding upon such holder and upon all future holders
and owners of such Serial Mortgage Note and of any Serial Mortgage Notes
issued in exchange or substitution therefor, irrespective of whether or not any
notation in regard thereto is made upon any such Serial Mortgage Note. Any
action taken by the holders of the percentage in aggregate principal amount of
the Serial Mortgage Notes specified in this Serial Indenture in connection
with such action shall be conclusively binding upon California Petroleum, the
Indenture Trustee and the holders of all the Serial Mortgage Notes.
ARTICLE SEVEN
SUPPLEMENTAL INDENTURES.
SECTION 7.1 Supplemental Indentures Without Consent of Serial
Noteholders. California Petroleum, when authorized by a resolution of its
Board of Directors, Chevron and the Indenture Trustee may from time to time and
at any time enter into an indenture or indentures supplemental hereto for one
or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the
Collateral Trustee as security for the Serial Mortgage Notes any
property or assets;
(b) to evidence the succession of another corporation to
Chevron, or successive successions, and the assumption by the
successor corporation of the covenants, agreements and obligations of
Chevron pursuant to Article Eight;
(c) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may
be defective or inconsistent with any other provision contained herein
or in any supplemental indenture; or to make such other provisions in
regard to matters or questions arising under this Serial Indenture or
under any supplemental indenture as they may deem necessary or
desirable and which shall not adversely affect the interests of the
holders of the Serial Mortgage Notes; and
(d) to comply with the requirements of the Commission in order
to maintain the qualification of this Serial Indenture under the
Trust Indenture Act.
The Indenture Trustee is hereby authorized to join in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property
thereunder, but the Indenture Trustee shall not be obligated to enter into any
such supplemental indenture which affects the Indenture Trustee's own rights,
duties or immunities under this Serial Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed without the consent of the holders of any of the
Serial Mortgage Notes at the time Outstanding, notwithstanding any of the
provisions of Section 7.2.
SECTION 7.2 Supplemental Indentures With Consent of Serial
Noteholders. With the consent (evidenced as provided in Article Six) of the
holders of a majority in aggregate principal amount of the Serial Mortgage
Notes at the time Outstanding, California Petroleum, when authorized by a
resolution of its Board of Directors, Chevron and the Indenture Trustee may,
from time to time and at any time, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Serial Indenture or of
any supplemental indenture or of modifying in any manner the rights of the
holders of the Serial Mortgage Notes; provided that no such supplemental
indenture shall (a) extend the final maturity of any Serial Mortgage Note, or
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any amount payable on redemption thereof
or impair or affect the right of any Serial Noteholder to institute suit for
the payment thereof without the consent of the holder of each Serial Mortgage
Note so affected, or (b) reduce the aforesaid percentage of Serial Mortgage
Notes, the consent of the holders of which is required for any such
supplemental indenture, without the consent of the holders of all Serial
Mortgage Notes then Outstanding; and provided further that no such
supplemental indenture shall (i) change in any manner or eliminate Sections
3.5, 3.8 or 3.9 or any of the Indenture Events of Default set forth in Section
4.1 or (ii) effect any of the modifications described in clause (a) or (b)
above, without the consent pursuant to Section 7.03(d) of the Collateral
Agreement of the Collateral Trustee and the holders of a majority in aggregate
principal amount of Term Mortgage Notes outstanding under the Term Indenture.
Upon the request of California Petroleum, accompanied by a copy
of a resolution of the Board of Directors certified by the Secretary or an
Assistant Secretary of California Petroleum authorizing the execution of any
such supplemental indenture, and Chevron and upon the filing with the
Indenture Trustee of evidence of the consent of Serial Noteholders and other
documents, if any, required by Section 6.1 the Indenture Trustee shall join
with California Petroleum and Chevron in the execution of such supplemental
indenture unless such supplemental indenture affects the Indenture Trustee's
own rights, duties or immunities under this Serial Indenture or otherwise, in
which case the Indenture Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Serial
Noteholders under this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall
approve the substance thereof.
Promptly after the execution by California Petroleum, Chevron
and the Indenture Trustee of any supplemental indenture pursuant to the
provisions of this Section, California Petroleum shall mail a notice thereof by
first-class mail to the holders of Serial Mortgage Notes at their addresses as
they shall appear on the registry books of California Petroleum, setting forth
in general terms the substance of such supplemental indenture. Any failure of
California Petroleum to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture.
SECTION 7.3 Effect of Supplemental Indenture. Upon the
execution of any supplemental indenture pursuant to the provisions hereof,
this Serial Indenture shall be and be deemed to be modified and amended in
accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Serial Indenture of the
Indenture Trustee, Chevron, California Petroleum and the holders of Serial
Mortgage Notes shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and
all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Serial Indenture for
any and all purposes.
SECTION 7.4 Documents to Be Given to Indenture Trustee. The
Indenture Trustee, subject to the provisions of Sections 5.1 and 5.2, may
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such supplemental indenture complies with the applicable
provisions of this Serial Indenture.
SECTION 7.5 Notation on Serial Mortgage Notes in Respect of
Supplemental Indentures. Serial Mortgage Notes authenticated and delivered
after the execution of any supplemental indenture pursuant to the provisions
of this Article may bear a notation in form approved by the Indenture Trustee
as to any matter provided for by such supplemental indenture or as to any
action taken at any such meeting. If California Petroleum, Chevron or the
Indenture Trustee shall so determine, new Serial Mortgage Notes so modified as
to conform, in the opinion of the Indenture Trustee, Chevron and California
Petroleum, to any modification of this Serial Indenture contained in any such
supplemental indenture may be prepared by California Petroleum, authenticated
by the Indenture Trustee and delivered in exchange for the Serial Mortgage
Notes then Outstanding.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE OR CONVEYANCE.
SECTION 8.1 Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions. Chevron covenants that so long as
any of the Serial Mortgage Notes are Outstanding, it will maintain its
corporate existence, will not dissolve, sell or otherwise dispose of all or
substantially all of its assets and will not consolidate with or merge into
another corporation or permit one or more other corporations to consolidate
with or merge into it; provided that Chevron may, without violating the
covenants contained in this Section 8.1, consolidate with or merge into
another corporation or permit one or more other corporations to consolidate
with or merge into it, or sell or otherwise transfer to another corporation
all or substantially all of its assets as an entirety and thereafter dissolve,
if the surviving, resulting or transferee corporation, as the case may be, (i)
shall be incorporated and existing under the laws of one of the States of the
United States of America, (ii) expressly assumes, if such corporation is not
Chevron, all of the obligations of Chevron hereunder and (iii) is not, after
such transaction, otherwise in default under any provisions hereof.
SECTION 8.2 Successor Corporation Substituted. In case of any
such consolidation, merger, sale or conveyance, and following such an
assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for Chevron, with the same effect as if it had
been named herein.
In case of any such consolidation, merger, sale, lease or
conveyance such changes in phraseology and form (but not in substance) may be
made in the Serial Mortgage Notes thereafter to be issued as may be
appropriate.
In the event of any such sale or conveyance (other than a
conveyance by way of lease) Chevron or any successor corporation which shall
theretofore have become such in the manner described in this Article shall be
discharged from all obligations and covenants under this Serial Indenture and
the Serial Mortgage Notes and may be liquidated and dissolved.
SECTION 8.3 Opinion of Counsel to Indenture Trustee. The
Indenture Trustee, subject to the provisions of Sections 5.1 and 5.2, may
receive an Opinion of Counsel as conclusive evidence that any such
consolidation, merger, sale, lease or conveyance, and any such assumption, and
any such liquidation or dissolution, complies with the applicable provisions
of this Serial Indenture.
ARTICLE NINE
SATISFACTION AND DISCHARGE OF
SERIAL INDENTURE; UNCLAIMED MONEYS.
SECTION 9.1 Satisfaction and Discharge of Serial Indenture.
If at any time (a) California Petroleum shall have paid or caused to be paid
the principal of and interest on all the Serial Mortgage Notes Outstanding
hereunder, as and when the same shall have become due and payable, or (b)
California Petroleum shall have delivered to the Indenture Trustee for
cancellation all Serial Mortgage Notes theretofore authenticated (other than
any Serial Mortgage Notes which shall have been destroyed, lost or stolen and
which shall have been replaced or paid as provided in Section 2.6) or (c) (i)
all such securities not theretofore delivered to the Indenture Trustee for
cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for redemption under
arrangements satisfactory to the Indenture Trustee for the giving of notice of
redemption, and (ii) California Petroleum shall have irrevocably deposited or
caused to be deposited with the Indenture Trustee (or the Collateral Trustee
on behalf of the Indenture Trustee) as trust funds the entire amount in cash
or direct obligations of the United States of America, backed by its full
faith and credit, maturing as to principal and interest in such amounts and at
such times as will insure the availability of cash sufficient to pay at
maturity or upon redemption all such Serial Mortgage Notes not theretofore
delivered to the Indenture Trustee for cancellation, including principal and
interest due or to become due to such date of maturity as the case may be, and
if, in any such case, California Petroleum shall also pay or cause to be paid
all other sums payable hereunder by California Petroleum, then this Serial
Indenture shall cease to be of further effect (except as to (i) rights of
registration of transfer and exchange, (ii) substitution of apparently
mutilated, defaced, destroyed, lost or stolen Serial Mortgage Notes, (iii)
rights of holders to receive payments of principal thereof and interest
thereon, upon the original stated due dates therefor (but not upon
acceleration), (iv) the rights, obligations and immunities of the Indenture
Trustee hereunder and (v) the rights of the Serial Noteholders as
beneficiaries hereof with respect to the property so deposited with or on
behalf the Indenture Trustee payable to all or any of them), and the Indenture
Trustee, on demand of California Petroleum accompanied by an Officers'
Certificate and an Opinion of Counsel and at the cost and expense of
California Petroleum, shall execute proper instruments acknowledging such
satisfaction of and discharging this Serial Indenture. California Petroleum
agrees to reimburse the Indenture Trustee for any costs or expenses thereafter
reasonably and properly incurred and to compensate the Indenture Trustee for
any services thereafter reasonably and properly rendered by the Indenture
Trustee in connection with this Serial Indenture or the Serial Mortgage Notes.
SECTION 9.2 Application by Indenture Trustee of Funds
Deposited for Payment of Serial Mortgage Notes. Subject to Section 9.4, all
moneys deposited with the Indenture Trustee pursuant to Section 9.1 shall be
held in trust and applied by it to the payment, either directly or through any
paying agent (including the Collateral Trustee), to the holders of the
particular Serial Mortgage Notes for the payment or redemption of which such
moneys have been deposited with the Indenture Trustee, of all sums due and to
become due thereon for principal and interest; but such money need not be
segregated from other funds except to the extent required by law.
SECTION 9.3 Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Serial Indenture all
moneys then held by any paying agent under the provisions of the Collateral
Agreement in accordance with this Serial Indenture shall be paid to the
Persons entitled thereto pursuant to the Related Security Documents and
thereupon such paying agent shall be released from all further liability with
respect to such moneys.
SECTION 9.4 Return of Moneys Held by Indenture Trustee and
Paying Agent Unclaimed for Two Years. Any moneys deposited with or paid to
the Indenture Trustee or any paying agent for the payment of the principal of
or interest on any Serial Mortgage Note and not applied but remaining
unclaimed for two years after the date upon which such principal or interest
shall have become due and payable, shall, upon the written request of
California Petroleum and unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property law, be repaid to
California Petroleum by the Indenture Trustee or such paying agent, and the
holder of such Serial Mortgage Note shall, unless otherwise required by
mandatory provisions of applicable escheat or abandoned or unclaimed property
laws, thereafter look only to California Petroleum for any payment which such
holder may be entitled to collect, and all liability of the Indenture Trustee
or any paying agent with respect to such moneys shall thereupon cease.
ARTICLE TEN
MISCELLANEOUS PROVISIONS.
SECTION 10.1 Incorporators, Stockholders, Officers and
Directors of California Petroleum Exempt from Individual Liability. No
recourse under or upon any obligation, covenant or agreement contained in this
Serial Indenture, or in any Serial Mortgage Note, or because of any
indebtedness evidenced thereby, shall be had against any incorporator, as such
or against any past, present or future stockholder, officer or director, as
such, of California Petroleum or of any successor, either directly or through
California Petroleum or any successor, under any rule of law, statute or
constitutional provision or by the enforcement of any assessment or by any
legal or equitable proceeding or otherwise, all such liability being expressly
waived and released by the acceptance of the Serial Mortgage Notes by the
holders thereof and as part of the consideration for the issue of the Serial
Mortgage Notes.
SECTION 10.2 Provisions of Serial Indenture for the Sole
Benefit of Parties and Serial Noteholders. Nothing in this Serial Indenture
or in the Serial Mortgage Notes, expressed or implied, shall give or be
construed to give to any person, firm or corporation, other than the parties
hereto and their successors and the holders of the Serial Mortgage Notes, any
legal or equitable right, remedy or claim under this Serial Indenture or under
any covenant or provision herein contained, all such covenants and provisions
being for the sole benefit of the parties hereto and their successors and of
the holders of the Serial Mortgage Notes.
SECTION 10.3 Successors and Assigns of California Petroleum
Bound by Serial Indenture. All the covenants, stipulations, promises and
agreements in this Serial Indenture contained by or in behalf of California
Petroleum shall bind its successors and assigns, whether so expressed or not.
SECTION 10.4 Notices and Demands on California Petroleum,
Indenture Trustee and Serial Noteholders. Any notice or demand which by any
provision of this Serial Indenture is required or permitted to be given or
served by the Indenture Trustee or by the holders of Serial Mortgage Notes to
or on California Petroleum may be given or served by being deposited postage
prepaid, first-class mail (except as otherwise specifically provided herein)
addressed (until another address of California Petroleum is filed by
California Petroleum with the Indenture Trustee) to California Petroleum
Transport Corporation, c/o J H Management Corporation, Room 6/9, One
International Place, Boston, MA 02110-2624. Any notice, direction, request or
demand by California Petroleum or any Serial Noteholder to or upon the
Indenture Trustee shall be deemed to have been sufficiently given or made, for
all purposes, if given or made at the Corporate Trust Office at 50 California
Street, San Francisco, CA 94111.
Where this Serial Indenture provides for notice to holders,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each
holder entitled thereto, at his last address as it appears in the Serial
Mortgage Note register. In any case where notice to holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular holder shall affect the sufficiency of such notice
with respect to other holders. Where this Serial Indenture provides for
notice in any manner, such notice may be waived in writing by the person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by holders
shall be filed with the Indenture Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
In case, by reason of the suspension of or irregularities in
regular mail service, it shall be impracticable to mail notice to California
Petroleum and Serial Noteholders when such notice is required to be given
pursuant to any provision of this Serial Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed
to be a sufficient giving of such notice.
SECTION 10.5 Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein. Upon any application or demand by
California Petroleum to the Indenture Trustee to take any action under any of
the provisions of this Serial Indenture, California Petroleum shall furnish to
the Indenture Trustee an Officers' Certificate stating that all conditions
precedent provided for in this Serial Indenture relating to the proposed action
have been complied with and an Opinion of Counsel stating that in the opinion
of such counsel all such conditions precedent have been complied with, except
that in the case of any such application or demand as to which the furnishing
of such documents is specifically required by any provision of this Serial
Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.
Each certificate or opinion provided for in this Serial
Indenture and delivered to the Indenture Trustee with respect to compliance
with a condition or covenant provided for in this Serial Indenture shall
include (a) a statement that the person making such certificate or opinion has
read such covenant or condition, (b) a brief statement as to the nature and
scope of the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based, (c) a statement
that, in the opinion of such person, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as
to whether or not such covenant or condition has been complied with and (d) a
statement as to whether or not, in the opinion of such person, such condition
or covenant has been complied with.
Any certificate, statement or opinion of an officer of
California Petroleum may be based, insofar as it relates to legal matters,
upon a certificate or opinion of or representations by counsel, unless such
officer knows that the certificate or opinion or representations with respect
to the matters upon which his certificate, statement or opinion may be based
as aforesaid are erroneous, or in the exercise of reasonable care should know
that the same are erroneous. Any certificate, statement or opinion of counsel
may be based, insofar as it relates to factual matters information with
respect to which is in the possession of California Petroleum, upon the
certificate, statement or opinion of or representations by an officer or
officers of California Petroleum, unless such counsel knows that the
certificate, statement or opinion or representations with respect to the
matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know
that the same are erroneous.
Any certificate, statement or opinion of an officer of
California Petroleum or of counsel may be based, insofar as it relates to
accounting matters, upon a certificate or opinion of or representations by an
accountant or firm of accountants in the employ of California Petroleum,
unless such officer or counsel, as the case may be, knows that the certificate
or opinion or representations with respect to the accounting matters upon
which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with the Indenture Trustee shall contain a statement that
such firm is independent.
SECTION 10.6 Payments Due on Saturdays, Sundays and Holidays.
If the date of maturity of interest on or principal of the Serial Mortgage
Notes, the date fixed for redemption of any Serial Mortgage Note or the date
for the payment of any other amount due thereunder or hereunder shall not be a
Business Day, then such payment need not be made on such date, but may be made
on the next succeeding Business Day with the same force and effect as if made
on the date of maturity, the date fixed for redemption or such other date for
payment, and, provided that payment is made on such next succeeding Business
Day, no interest shall accrue for the period of such extension.
SECTION 10.7 Conflict of Any Provision of Serial Indenture
with Trust Indenture Act. If and to the extent that any provision of this
Serial Indenture limits, qualifies or conflicts with another provision
included in this Serial Indenture by operation of Sections 310 to 317,
inclusive, of the Trust Indenture Act (an "incorporated provision"), such
incorporated provision shall control.
SECTION 10.8 New York Law to Govern. This Serial Indenture
and each Serial Mortgage Note shall be deemed to be a contract under the laws
of the State of New York, and for all purposes shall be construed in
accordance with the laws of said State, except as may otherwise be required by
mandatory provisions of law.
SECTION 10.9 Counterparts. This Serial Indenture may be
executed in any number of counterparts, each of which shall be an original;
but such counterparts shall together constitute but one and the same
instrument.
SECTION 10.10 Effect of Headings. The Article and Section
headings herein and the Table of Contents are for convenience only and shall
not affect the construction hereof.
SECTION 10.11 Designated Representative. For purposes of
this Serial Indenture, all notices, requests, demands or other
communications to be given by California Petroleum hereunder may be given
by California Petroleum's designated representative. Notice of the
appointment of any such designated representative shall be given to the
Indenture Trustee and shall be in writing signed by California Petroleum
and acknowledged by such designated representative. The parties hereto
shall be entitled to rely upon any such notices, requests, demands and
other communications given by the designated representative as though the
same had been given by California Petroleum.
ARTICLE ELEVEN
REDEMPTION OF SERIAL MORTGAGE NOTES.
SECTION 11.1 Mandatory Redemption; Prices. (a) Except as
provided in this Section 11.01, the Serial Mortgage Notes may not be redeemed
prior to their respective Maturity Dates.
(b) California Petroleum shall redeem the Outstanding Serial
Mortgage Notes in part at 100% of the principal amount thereof together with
accrued interest to the date fixed for redemption if a Total Loss occurs or is
declared with respect to a Vessel. The aggregate principal amount of Serial
Mortgage Notes to be redeemed pursuant to this Section 11.1(b) shall equal the
Allocated Principal Amount of Serial Mortgage Notes for the related Vessel.
The redemption date for any redemption pursuant to this Section 11.1(b) shall
be the date which is 90 days after the occurrence of the Total Loss.
SECTION 11.2 Notice of Redemption; Partial Redemptions.
Notice of redemption to the holders of Serial Mortgage Notes to be redeemed
shall be given by mailing notice of such redemption by first class mail,
postage prepaid, at least 30 days and not more than 60 days prior to the date
fixed for redemption to such holders of Serial Mortgage Notes at their last
addresses as they shall appear upon the registry books. Any notice which is
mailed in the manner herein provided shall be conclusively presumed to have
been duly given, whether or not the holder receives the notice. Failure to
give notice by mail, or any defect in the notice to the holder of any Serial
Mortgage Note designated for redemption as a whole or in part shall not affect
the validity of the proceedings for the redemption of any other Serial
Mortgage Note.
The notice of redemption to each such holder shall specify the
principal amount of each Serial Mortgage Note held by such holder to be
redeemed, the date fixed for redemption, the redemption price, the place or
places of payment, that payment will be made upon presentation and surrender
of such Serial Mortgage Notes, that interest accrued to the date fixed for
redemption will be paid as specified in said notice and that on and after said
date interest thereon or on the portions thereof to be redeemed will cease to
accrue. If any Serial Mortgage Note is to be redeemed in part only the notice
of redemption shall state the portion of the principal amount thereof to be
redeemed and shall state that on and after the date fixed for redemption, upon
surrender of such Serial Mortgage Note, a new Serial Mortgage Note or Serial
Mortgage Notes in principal amount equal to the unredeemed portion thereof
will be issued.
The notice of redemption of Serial Mortgage Notes to be
redeemed shall be given by California Petroleum or, at California Petroleum's
request, by the Indenture Trustee in the name and at the expense of California
Petroleum.
On the redemption date specified in the notice of redemption
given as provided in this Section, California Petroleum shall deposit or cause
to be deposited with the Indenture Trustee or with the paying agent an amount
of money sufficient to redeem on the redemption date all the Serial Mortgage
Notes so called for redemption at the appropriate redemption price, together
with accrued interest to the date fixed for redemption. If less than all the
Outstanding Serial Mortgage Notes are to be redeemed California Petroleum will
deliver to the Indenture Trustee at least 45 days prior to the date fixed for
redemption an Officers' Certificate stating the aggregate principal amount of
Serial Mortgage Notes to be redeemed.
If less than all the Serial Mortgage Notes are to be redeemed,
the Indenture Trustee shall select Serial Mortgage Notes to be redeemed
ratably from each holder such that the ratio of the principal amount of each
series of Serial Mortgage Notes to be redeemed from each holder to the
aggregate principal amount of such series of Serial Mortgage Notes Outstanding
held by such holder shall, as nearly as practicable and subject to rounding,
equal the ratio of the aggregate principal amount of all Serial Mortgage Notes
to be redeemed on such redemption date to the aggregate principal amount of
all Serial Mortgage Notes Outstanding. Serial Mortgage Notes may be redeemed
in part in multiples of $1,000 only. The Indenture Trustee shall promptly
notify California Petroleum in writing of the Serial Mortgage Notes selected
for redemption and, in the case of any Serial Mortgage Notes selected for
partial redemption, the principal amount thereof to be redeemed. For all
purposes of this Serial Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Serial Mortgage Notes shall relate,
in the case of any Serial Mortgage Note redeemed or to be redeemed only in
part, to the portion of the principal amount of such Serial Mortgage Note
which has been or is to be redeemed.
SECTION 11.3 Payment of Serial Mortgage Notes Called for
Redemption. If notice of redemption has been given as above provided, the
Serial Mortgage Notes or portions of Serial Mortgage Notes specified in such
notice shall become due and payable on the date and at the place stated in
such notice at the applicable redemption price, together with interest accrued
to the date fixed for redemption, and on and after said date (unless California
Petroleum shall default in the payment of such Serial Mortgage Notes at the
redemption price, together with interest accrued to said date) interest on the
Serial Mortgage Notes or portions of Serial Mortgage Notes so called for
redemption shall cease to accrue and, except as provided in Sections 5.5 and
9.4, such Serial Mortgage Notes shall cease from and after the date fixed for
redemption to be entitled to any benefit or security under this Serial
Indenture, and the holders thereof shall have no right in respect of such
Serial Mortgage Notes except the right to receive the redemption price thereof
and unpaid interest to the date fixed for redemption. On presentation and
surrender of such Serial Mortgage Notes at a place of payment specified in
said notice, said Serial Mortgage Notes or the specified portions thereof
shall be paid and redeemed by California Petroleum at the applicable
redemption price, together with interest accrued thereon to the date fixed for
redemption; provided that any semi-annual payment of interest becoming due on
the date fixed for redemption shall be payable to the holders of such Serial
Mortgage Notes registered as such on the relevant record date subject to the
terms and provisions of Section 2.4 hereof.
If any Serial Mortgage Note called for redemption shall not be
so paid upon surrender thereof for redemption, the principal shall, until paid
or duly provided for, bear interest from the date fixed for redemption at the
Default Rate.
Upon presentation of any Serial Mortgage Note redeemed in part
only, California Petroleum shall execute and the Indenture Trustee shall
authenticate and deliver to or on the order of the holder thereof, at the
expense of California Petroleum, a new Serial Mortgage Note or Serial Mortgage
Notes, of authorized denominations, in principal amount equal to the
unredeemed portion of the Serial Mortgage Note so presented.
ARTICLE TWELVE
SECURITY.
SECTION 12.1 Security. The Serial Mortgage Notes will be
secured by the Collateral pursuant to the Collateral Agreement and the other
Security Documents. Each holder of a Serial Mortgage Note, by its acceptance
thereof, consents and agrees to the terms of the Security Documents (including
without limitation the provisions providing for the release of the Collateral
provided for herein and therein) as the same may be in effect or may be
amended from time to time in accordance with their terms and authorizes and
directs the Indenture Trustee and the Collateral Trustee to perform its
respective obligations and exercise its respective rights under the Collateral
Agreement and the other Security Documents in accordance therewith; provided
that in the event the terms thereof limit, qualify or conflict with the duties
imposed by the provisions of the Trust Indenture Act, the Trust Indenture Act
shall control.
SECTION 12.2 Recording, etc. California Petroleum will cause
the applicable Security Documents, including the Mortgages and any financing
statements, all amendments or supplements to each of the foregoing and any
other similar security documents as necessary, to be registered, recorded and
filed or re-recorded, re-filed and renewed in such manner and in such place or
places, if any, as may be required by law or reasonably requested by the
Indenture Trustee or the Collateral Trustee in order fully to preserve and
protect the Lien of the Collateral Trustee securing the Serial Mortgage Notes
(for the ratable benefit of the Serial Noteholders) and to effectuate and
preserve the security of the Serial Noteholders and all rights of the
Collateral Trustee and the Indenture Trustee.
California Petroleum shall furnish the Trustee:
(a) promptly after the execution and delivery of this Serial
Indenture, and promptly after the execution and delivery of any other
instrument of further assurance or amendment, an Opinion of Counsel
either (i) stating that, in the opinion of such counsel, and as of
the dated such opinion, this Serial Indenture, the Mortgages and
applicable Security Documents and all other instruments of further
assurance or amendment have been properly recorded, registered and
filed, as appropriate, to the extent necessary to make effective the
Lien intended to be created by such Security Documents and reciting
the details of such action or referring to prior Opinions of Counsel
in which such details are given, and stating that as to such Security
Documents and such other instruments such recording, registering and
filing are the only recordings, registerings and filings necessary to
give notice thereof and that no re-recordings, re-registerings or
re-filings are necessary to maintain such notice, and further stating
that all financing statements and continuation statements have been
executed and filed that are necessary fully to preserve and protect
the rights of the Serial Noteholders the Indenture Trustee and the
Collateral Trustee hereunder and under the Security Documents or (ii)
stating that, in the opinion of such counsel, no such action is
necessary to make any other Lien created under any of the Security
Documents effective as intended by such Security Documents.
(b) within 30 days after August 1 in each year beginning with
the year 1995, an Opinion of Counsel, dated as of such date, either
(i) stating that, in the opinion of such counsel, such action has
been taken with respect to the recording, registering, filing,
re-recording, re-registering and re-filing of this Serial Indenture
and all supplemental indentures, financing statements, continuation
statements or other instruments of further assurance as is necessary
to maintain the Lien of this Serial Indenture and the Security
Documents and reciting the details of such action or referring to
prior Opinions of Counsel in which such details are given, and
stating that all financing statements and continuation statements
have been executed and filed that are necessary fully to preserve and
protect the rights of the Serial Noteholders, the Indenture Trustee
and the Collateral Trustee hereunder and under the Security Documents
or (ii) stating that, in the opinion of such counsel, no such action
is necessary to maintain such Lien.
SECTION 12.3 Protection of the Trust Estate. The Indenture
Trustee and the Collateral Trustee shall have the power to enforce the
obligations of California Petroleum and Chevron under this Serial Indenture
and California Petroleum under the Security Documents, to institute and
maintain such suits and proceedings as it may deem expedient to prevent any
impairment of the Collateral under any of the Security Documents and in the
profits, rents, revenues and other income arising therefrom, including the
power to institute and maintain suits or proceedings to restrain the
enforcement of or compliance with any legislative or other governmental
enactment, rule or order that may be unconstitutional or otherwise invalid if
the enforcement of, or compliance with, such enactment, rule or order would
impair any Collateral or be prejudicial to the interests of the Serial
Noteholders, the Indenture Trustee or the Collateral Trustee, to the extent
permitted thereunder.
SECTION 12.4 Release of Lien. (a) Subject to the provisions
of Section 7.2 and so long as no Enforcement Notice is in effect, Collateral
may be released from the Lien and security created by this Serial Indenture or
the Collateral Agreement and the Related Security Documents, as the case may
be, at any time or from time to time in accordance with the provisions of the
Related Security Documents, the Trust Indenture Act and as provided hereby.
In the case of Collateral consisting of cash or Permitted Investments in the
Trust Accounts, such Collateral shall be released as provided in the
Collateral Agreement without the need for any Officer's Certificate, Opinion
of Counsel, release, waiver or other action.
(b) Upon the request of California Petroleum pursuant to an
Officer's Certificate and an Opinion of Counsel certifying that all conditions
precedent hereunder have been met (to be provided at the sole cost and expense
of California Petroleum) and upon the satisfaction of such conditions
precedent hereunder, the Indenture Trustee or the Collateral Trustee, as the
case may be, shall release (i) Collateral, as to the release of which the
consent of Serial Noteholders has been obtained, and (ii) all Collateral
(except as provided in Article Nine hereof) upon discharge or defeasance of
this Serial Indenture in accordance with Article Nine hereof.
(c) Upon receipt of such Officer's Certificate, the Indenture
Trustee or the Collateral Trustee, as the case may be, must execute, deliver
or acknowledge any necessary or proper instruments of termination,
satisfaction or release to evidence the release of any Collateral permitted
to be released pursuant to this Serial Indenture or the Serial Indenture and
the Related Security Documents, as the case may be.
(d) The release of any Collateral from the terms of this
Serial Indenture or this Serial Indenture and the Related Security Documents,
as the case may be, will not be deemed to impair the security under this
Serial Indenture in contravention of the provisions hereof if and to the extent
the Collateral is released pursuant to the terms hereof and of the Related
Security Documents. To the extent applicable, California Petroleum and any
other obligor shall cause Section 314(d) of the Trust Indenture Act relating to
the release of property from the Lien arising out of the Security Documents to
be complied with. Any certificate or opinion required by Section 314(d) of
the Trust Indenture Act may be made by any Responsible Officer of California
Petroleum, provided that to the extent required by Section 314(d) of the Trust
Indenture Act, any such certificate or opinion shall be made by an independent
engineer, appraiser or other expert (as such terms are set forth in Section
314(d) of the Trust Indenture Act), who is not an Affiliate of California
Petroleum or any other obligor.
Whenever Collateral is to be released pursuant to this Section
12.4, the Indenture Trustee or the Collateral Trustee, as the case may be,
will execute any document or termination statement reasonably necessary to
release the Lien of this Serial Indenture or this Serial Indenture and the
Related Security Documents, as the case may be.
IN WITNESS WHEREOF, the parties hereto have caused this Serial
Indenture to be duly executed this ____ day of July, 1994 by their respective
officers thereunto duly authorized and acknowledge that this Serial Indenture
has been made and delivered in The City of New York, and this Serial Indenture
shall be effective only upon such execution and delivery.
CALIFORNIA PETROLEUM TRANSPORT
CORPORATION
By____________________________
[CORPORATE SEAL]
Attest:
By________________________
CHEMICAL TRUST COMPANY OF
CALIFORNIA, not in its
individual capacity, except
as expressly provided
herein, but as Indenture
Trustee
By____________________________
[CORPORATE SEAL]
Attest:
By________________________
CHEVRON CORPORATION, as
Guarantor of the Initial
Charter obligations of
Chevron Transport
Corporation
By____________________________
[CORPORATE SEAL]
Attest:
By________________________
EXHIBIT A
[FORM OF FACE OF SERIAL MORTGAGE NOTE]
Unless and until this Serial Mortgage Note is presented by an authorized
representative of the Depository Trust Company ("DTC"), to California
Petroleum Transport Corporation or its agents for registration of transfer,
exchange or payment, and any Serial Mortgage Note issued is registered in the
name of Cede & Co. or such other entity, as is requested by an authorized
representative of DTC (and any payment hereon is made to Cede & Co.), any
transfer, pledge or other use hereof for value or otherwise by or to any
Person is wrongful since the registered owner hereof, Cede & Co., has an
interest herein.
No. $
California Petroleum Transport Corporation
___% First Preferred Mortgage Notes Due ____
Payable from Charterhire Payments by
Chevron Transport Corporation
Whose Charter Obligations are Guaranteed by
Chevron Corporation
California Petroleum Transport Corporation, a Delaware
Corporation ("California Petroleum"), for value received hereby promises to
pay to ____________ or registered assigns the principal sum of __________
Dollars at the office or agency of Chemical Trust Company of
California (the "Indenture Trustee") or its paying agent under the Serial
Indenture dated as of (DATE), 1994 among California Petroleum, solely for
purposes of the Trust Indenture Act of 1939, as amended, Chevron Corporation
("Chevron"), and the Indenture Trustee (the "Serial Indenture"; terms defined
in the Serial Indenture are used herein as so defined) maintained for such
purpose in New York on ____, in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts, and to pay interest, semi-annually on ______ and
________ of each year, on said principal sum in like coin or currency at the
rate per annum set forth above at said office or agency from the _________ or
the __________, as the case may be, next preceding the date of this Serial
Mortgage Note to which interest on the Serial Mortgage Notes has been paid or
duly provided for, unless the date hereof is a date to which interest on the
Serial Mortgage Notes has been paid or duly provided for, in which case from
the date of this Serial Mortgage Note, or unless no interest has been paid or
duly provided for on the Serial Mortgage Notes, in which case from ________,
1994 until payment of said principal sum has been made or duly provided for.
Notwithstanding the foregoing, if the date hereof is after any ________ or
________ and before the following ________ or _________, as the case may be,
this Serial Mortgage Note shall bear interest from such ________ or _______;
provided that, if California Petroleum shall default in the payment of
interest due on such _________ or ________ then this Serial Mortgage Note
shall bear interest from the next preceding __________ or _________ to which
interest on the Serial Mortgage Notes has been paid or duly provided for, or,
if no interest has been paid or duly provided for on the Serial Mortgage Notes
since the original issue date of this Serial Mortgage Note, from ________,
1994. The interest so payable on any _________ or _________ will, except as
otherwise provided in the Serial Indenture, be paid to the person in whose
name this Serial Mortgage Note is registered at the close of business on the
________ or _________ preceding such ________ or ___________, whether or not
such day is a Business Day.
Interest is payable on demand at the Default Rate on any
overdue payment of principal of, interest or any other amount payable on this
Serial Mortgage Note from the due date for such payment to the date such
amount is paid in full.
If any amount payable under this Serial Mortgage Note or under
the Serial Indenture falls due on a day that is not a Business Day, then such
amount shall be payable on the next succeeding Business Day without additional
interest thereon for the period of such extension (provided that payment is
made on such next succeeding Business Day).
Reference is made to the further provisions of this Serial
Mortgage Note set forth on the reverse hereof. Such further provisions shall
for all purposes have the same effect as though fully set forth at this place.
This Serial Mortgage Note shall not be valid or obligatory
until the certificate of authentication hereon shall have been duly signed by
the Indenture Trustee acting under the Serial Indenture.
IN WITNESS WHEREOF, California Petroleum has caused this
instrument to be duly executed under its corporate seal.
Dated:
[Seal]
______________________________
______________________________
[FORM OF REVERSE OF SERIAL MORTGAGE NOTE]
California Petroleum Transport Corporation
___% First Preferred Mortgage Notes Due ____
Payable from Charterhire Payments by
Chevron Transport Corporation
Whose Charter Obligations are Guaranteed by
Chevron Corporation
This Serial Mortgage Note is one of a duly authorized issue of
debt securities of California Petroleum maturing serially from 1995 to 2005,
limited as to the maturity hereof to the aggregate principal amount of $_____,
and limited as to all maturities of Serial Mortgage Notes to the aggregate
principal amount of $168,500,000 (except as otherwise provided in the Serial
Indenture), issued or to be issued pursuant to the Serial Indenture.
Reference is hereby made to the Serial Indenture, all indentures supplemental
thereto and the Collateral Agreement for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Indenture Trustee, California Petroleum, Chevron and the holders of the Serial
Mortgage Notes.
This Serial Mortgage Note is secured by the Collateral pursuant
to the Collateral Agreement and the other Security Documents. Each holder of
this Serial Mortgage Note, by its acceptance thereof, consents and agrees to
the terms of the Security Documents (including without limitation the
provisions providing for the release of the Collateral provided for herein and
therein) as the same may be in effect or may be amended from time to time in
accordance with their terms and authorizes and directs the Indenture Trustee
and the Collateral Trustee to perform their respective obligations and
exercise their respective rights under the Collateral Agreement and the other
Security Documents in accordance therewith; provided that in the event the
terms thereof limit, qualify or conflict with the duties imposed by the
provisions of the Trust Indenture Act, the Trust Indenture Act shall control.
In case an Indenture Event of Default shall have occurred and
be continuing, the principal of all the Serial Mortgage Notes may be declared
due and payable, in the manner and with the effect, and subject to the
conditions, provided in the Serial Indenture. The Serial Indenture provides
that in certain events such declaration and its consequences may be waived by
the holders of a majority in aggregate principal amount of the Serial Mortgage
Notes then Outstanding and that, prior to any such declaration, such holders
may waive any past default under the Serial Indenture and its consequences
except a default in the payment of principal of or interest on any of the
Serial Mortgage Notes. Any such consent or waiver by the holder of this Serial
Mortgage Note (unless revoked as provided in the Serial Indenture) shall be
conclusive and binding upon such holder and upon all future holders and owners
of this Serial Mortgage Note and any Serial Mortgage Note which may be issued
in exchange or substitution herefor, whether or not any notation thereof is
made upon this Serial Mortgage Note or such other Serial Mortgage Notes.
The Serial Indenture permits California Petroleum, Chevron and
the Indenture Trustee, with the consent of the holders of not less than a
majority in aggregate principal amount of the Serial Mortgage Notes at the
time Outstanding, evidenced as provided in the Serial Indenture, to execute
supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Serial Indenture or of any
supplemental indenture or modifying in any manner the rights of the holders of
the Serial Mortgage Notes; provided that no such supplemental indenture shall
(a) extend the final maturity of any Serial Mortgage Note, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon or reduce any amount payable on the redemption hereof, or
impair or affect the rights of any Serial Noteholder to institute suit for the
payment thereof without the consent of the holder of each Serial Mortgage Note
so affected; or (b) reduce the aforesaid percentage of Serial Mortgage Notes,
the consent of the holders of which is required for any such supplemental
indenture, without the consent of the holders of all Serial Mortgage Notes then
Outstanding; provided further that no such supplemental indenture shall (i)
change in any manner or eliminate Sections 3.5, 3.8 or 3.9 of the Serial
Indenture or any of the Indenture Events of Default set forth in Section 4.1
thereof or (ii) effect any of the modifications described in clause (a) or (b)
above, without the consent pursuant to Section 7.03(d) of the Collateral
Agreement of the Collateral Trustee and the holders of a majority in aggregate
principal amount of Term Mortgage Notes outstanding under the Term Indenture.
No reference herein to the Serial Indenture and no provision of
this Serial Mortgage Note or of the Serial Indenture shall alter or impair the
obligation of California Petroleum, which is absolute and unconditional, to
pay the principal of and interest on this Serial Mortgage Note at the place,
times, and rate, and in the currency, herein prescribed.
The Serial Mortgage Notes are issuable only as registered
Serial Mortgage Notes without coupons in denominations of $_____ and any
multiple of $1,000.
Serial Mortgage Notes may be exchanged for a like aggregate
principal amount of Serial Mortgage Notes of other authorized denominations at
the office or agency of the Indenture Trustee maintained for such purpose and
in the manner and subject to the limitations provided in the Serial Indenture.
Upon due presentment for registration of transfer of this
Serial Mortgage Note as provided in the Serial Indenture, a new Serial
Mortgage Note or Serial Mortgage Notes of authorized denominations, for a like
aggregate principal amount, will be issued to the transferee as provided in
the Serial Indenture. No service charge shall be made for any such transfer,
but the Indenture Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto.
The Serial Mortgage Notes are also subject to redemption in
relevant part on notice as set forth above and at 100% of the principal amount
thereof together with accrued interest to the date fixed for redemption, all as
provided in the Serial Indenture if a Total Loss occurs or is declared with
respect to a Vessel. The aggregate principal amount of each series of Serial
Mortgage Notes to be redeemed pursuant to this paragraph shall equal the
Allocated Principal Amount of such Serial Mortgage Notes for the related
Vessel. The redemption date for any redemption pursuant to this paragraph
shall be the date which is 90 days after the occurrence of the Total Loss.
Subject to payment by California Petroleum of a sum sufficient
to pay the amount due on redemption, interest on this Serial Mortgage Note (or
portion hereof if this Serial Mortgage Note is redeemed in part) shall cease to
accrue upon the date duly fixed for redemption of this Serial Mortgage Note
(or portion hereof if this Serial Mortgage Note is redeemed in part).
California Petroleum, Chevron, the Indenture Trustee, and any
authorized agent of California Petroleum, Chevron or the Indenture Trustee,
may deem and treat the registered holder hereof as the absolute owner of this
Serial Mortgage Note (whether or not this Serial Mortgage Note shall be
overdue and notwithstanding any notation of ownership or other writing hereon
made by anyone other than California Petroleum or the Indenture Trustee or any
authorized agent of California Petroleum or the Indenture Trustee), for the
purpose of receiving payment of, or on account of, the principal hereof and,
subject to the provisions on the face hereof, interest hereon and for all
other purposes, and neither California Petroleum nor Chevron nor the Indenture
Trustee nor any authorized agent of California Petroleum or Chevron or the
Indenture Trustee shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or
the interest on this Serial Mortgage Note, for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Serial Indenture
or any indenture supplemental thereto, against any incorporator, shareholder,
officer or director, as such, past, present or future, of California Petroleum
or of any successor corporation, either directly or through California
Petroleum or any successor corporation, whether by virtue of any constitution,
statute or rule of law or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as part of
the consideration for the issue hereof, expressly waived and released.
[FORM OF INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Serial Mortgage Notes described in the
within-mentioned Serial Indenture.
Chemical Trust Company of
California, as Indenture
Trustee
________________________
Authorized Officer
EXHIBIT 4.3
CALPETRO TANKERS (BAHAMAS III) LIMITED
Shipowner
and
CALIFORNIA PETROLEUM TRANSPORT CORPORATION
Mortgagee
FIRST PREFERRED SHIP MORTGAGE
on the
m.t. "William E. Crain"
_________ __, 1994
Table of Contents
Page No.
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.............................................. 1
ARTICLE II
MORTGAGE
Section 2.01 Grant of Mortgage........................................ 2
Section 2.02 Indebtedness............................................. 3
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations and Warranties of the Shipowner.......... 3
ARTICLE IV
COVENANTS
Section 4.01 Payment of Indebtedness.................................. 6
Section 4.02 Corporate Existence...................................... 6
Section 4.03 Insurance................................................ 6
Section 4.04 Defense of Title......................................... 13
Section 4.05 Discharge of Liens....................................... 13
Section 4.06 Liens.................................................... 13
Section 4.07 Use of Vessel............................................ 14
Section 4.08 Notifications............................................ 15
Section 4.09 Payment of Crew's Wages and Allotments................... 15
Section 4.10 Charter of Vessel........................................ 16
Section 4.11 Maintenance of Vessel.................................... 16
Section 4.12 Statement of Classification Society...................... 16
Section 4.13 Surveys of Vessel........................................ 17
Section 4.14 Access to Vessel......................................... 17
Section 4.15 Books and Records........................................ 17
Section 4.16 Registration of Mortgage; Recordation of Mortgage........ 17
Section 4.17 Notice of Mortgage....................................... 18
Section 4.18 Further Assurances....................................... 18
Section 4.19 Withholding Tax.......................................... 19
Section 4.20 Expenses................................................. 19
Section 4.21 Indebtedness............................................. 19
Section 4.22 Business of Shipowner.................................... 19
Section 4.23 No Bankruptcy Petition................................... 20
Section 4.24 Restricted Payment....................................... 20
Section 4.25 Loans, Advances and Other Liabilities.................... 20
Section 4.26 Restricted Payment....................................... 20
ARTICLE V
EVENTS OF DEFAULT; REMEDIES
Section 5.01 Events of Default........................................ 20
Section 5.02 Remedies................................................. 22
Section 5.03 Sale of the Vessel....................................... 24
Section 5.04 Mortgagee as Attorney-in Fact............................ 25
Section 5.05 Appointment of Receiver.................................. 25
Section 5.06 Arrest or Detention of Vessel............................ 25
Section 5.07 Defense of Suits......................................... 25
Section 5.08 Cumulative Rights, Powers and Remedies................... 26
Section 5.09 Application of Proceeds.................................. 26
Section 5.10 Mortgagee's Right to Remedy Defaults..................... 27
Section 5.11 Delegation of Powers..................................... 28
Section 5.12 Legal Actions............................................ 28
Section 5.13 Mortgage Subject to Rights of Initial Charterer under the
Initial Charter.......................................... 28
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.01 Performance by Initial Charterer......................... 29
Section 6.02 Discharge of Mortgage.................................... 29
Section 6.03 Indemnity................................................ 30
Section 6.04 Governing Law............................................ 30
Section 6.05 Severability............................................. 30
Section 6.06 Notices.................................................. 30
Section 6.07 Headings................................................. 31
Section 6.08 General Interpretive Principles.......................... 31
Section 6.09 Successors and Assigns................................... 31
Section 6.10 Consent to Jurisdiction.................................. 32
Section 6.11 Payment.................................................. 32
Section 6.12 Recorded Amount.......................................... 32
Section 6.13 No Waiver of Preferred Status............................ 33
First Preferred Ship Mortgage, dated as of _________ __, 1994 (as
amended or supplemented from time to time, the "Mortgage"), from CalPetro
Tankers (Bahamas III) Limited, a company incorporated with limited liability
in the Bahamas whose registered office is at Mareva House, 4 George Street,
Nassau, Bahamas (hereinafter called the "Shipowner") to California Petroleum
Transport Corporation (the "Mortgagee").
WHEREAS, the Shipowner is the sole and unencumbered owner of the
whole of the motor tanker "William E. Crain" (the "Vessel") duly registered in
the name of the Shipowner under the laws and flag of Liberia on _____________,
199_, built in 199_, having the following approximate dimensions and tonnages:
length _ meters, breadth _ meters, depth _ meters, gross tonnage ________, net
tonnage _________, and more particularly described in the Certificate of
Registration with Official Number _ and with International Code Signal _____
and home port of Monrovia, Liberia;
WHEREAS, in order to secure the prompt and due payment to the
Mortgagee of the Indebtedness (as defined herein) and any and all other sums
which may be or become due to the Mortgagee under or pursuant to the Loan
Agreements, this Mortgage and any other Security Document and also to secure
the exact performance and observance and compliance with all and any of the
covenants and agreements and terms and conditions contained in the Loan
Agreements, this Mortgage and in the other Security Documents, the Shipowner
has duly authorized the execution and delivery of this Mortgage in favor of
the Mortgagee under and pursuant to Chapter 3 of Title 22 of the Code of Laws
of 1956, as at any time amended, of the laws of the Republic of Liberia.
NOW, THEREFORE, in consideration of the premises and of the
covenants herein contained, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
Capitalized terms used in this Mortgage and not otherwise defined
herein shall have the meanings assigned to such terms in either Schedule 1 to
this Mortgage or the Loan Agreements, and the definitions of such terms shall
be equally applicable to both the singular and the plural forms of such terms.
ARTICLE II
MORTGAGE
Section 2.01 Grant of Mortgage.
In consideration of the premises and of other good and valuable
consideration, the adequacy and receipt whereof are hereby acknowledged, and
in order to secure the payment of the Indebtedness and the repayment of any
costs of foreclosure or of retaking the Vessel, and the payment of all such
other amounts as may hereafter become secured by this Mortgage in accordance
with the terms hereof, and to secure the performance and observance of and
compliance with the covenants, terms and conditions contained in this
Mortgage, the Loan Agreements, and the other Security Documents to which the
Shipowner is a party, the Shipowner has granted, conveyed, pledged and
mortgaged and does by these presents grant, convey, pledge and mortgage to and
in favor of the Mortgagee, its successors and assigns the whole of the Vessel,
together with all of the boilers, engines, machinery, masts, spars, rigging,
boats, cables, anchors, chains, tackle, apparel, furniture, fittings, freights
and equipment thereunto appertaining or belonging, whether now owned or
hereafter acquired, whether on board or not, and all additions, improvements
and replacements hereafter made in or to the Vessel (the term "Vessel", as
used herein, shall include the Vessel together with all of the foregoing and
the Vessel's freights) To Have And To Hold the same unto the Mortgagee, its
successors and assigns, forever upon the terms set forth in this Mortgage for
the enforcement of the payment of the Indebtedness, the payment of any costs
of foreclosure or retaking of the Vessel and all such other amounts as may
hereafter become secured by this Mortgage in accordance with the terms hereof
and to secure the performance and observance of and compliance with the
covenants, terms and conditions contained in this Mortgage and the Security
Documents, it being agreed that if any amount payable by the Shipowner under
either Loan Agreement is not paid on its due date (whether formally demanded
or not) the whole or the balance of the Indebtedness and all other amounts
payable under the Security Documents shall forthwith on demand become payable;
provided, however, and the conditions of these presents are such that, if the
Shipowner shall pay or cause to be paid to the Mortgagee all of the
Indebtedness as set forth in the Security Documents, and if the Shipowner
shall pay all such other amounts as may hereafter become secured by this
Mortgage and all expenses which the Mortgagee shall have paid or incurred to
protect the security granted hereunder, and if the Shipowner shall perform,
observe and comply with all and singular of the covenants, terms and
conditions in this Mortgage, the Loan Agreements and the other Security
Documents contained, expressed or implied, to be performed, observed or
complied with by and on the part of the Shipowner or its successors or
assigns, all without delay or fraud and according to the true intent and
meaning hereof and therefor, then these presents and the rights of the
Mortgagee under this Mortgage and the other Security Documents shall cease
and, in such event, the Mortgagee agrees by accepting this Mortgage to
execute, at the expense of the Shipowner, all such documents as the Shipowner
may reasonably require to discharge this Mortgage under the laws of the
Republic of Liberia; otherwise this Mortgage shall remain in full force and
effect; provided further, however, the conditions of these presents are such
that, if the Shipowner shall satisfy or cause to be satisfied and pay or cause
to be paid to the Mortgagee all of the Serial Obligations, then these presents
and the rights of the Mortgagee under this Mortgage and the other Security
Documents with respect to the Serial Loan Agreement shall cease and, in such
event, this Mortgage shall secure all of the Indebtedness other than the
Serial Obligations.
Section 2.02 Indebtedness.
(a) The Shipowner acknowledges that pursuant to the Loan
Agreements it is jointly and severally liable with the Other Owners to the
Mortgagee in the original principal amount of Two Hundred Eighty-Six Million
Four Hundred Thousand United States Dollars (US$286,400,000). The Shipowner
shall repay the Obligations in accordance with terms and conditions of the
Loan Agreements with the last installment due and payable on _______________,
2014. The Shipowner further agrees to pay all other sums comprising the
Indebtedness in accordance with the terms, conditions and provisions in the
Loan Agreements and in this Mortgage and to perform, observe and comply with
the covenants, terms and obligations and conditions on its part to be
performed, observed and complied with contained or implied herein and in the
Loan Agreements and in the other Security Documents.
(b) The Shipowner shall also pay to the Mortgagee upon the
Mortgagee's first written demand all stamp duties, registration and/or
recording fees, charges for certificates, valuation fees, costs and expenses
(including, the fees and expenses of its attorneys) of any nature whatsoever
incurred by the Mortgagee in connection with the preparation, completion,
execution and registration of this Mortgage and all other claims, expenses,
costs, payments, disbursements, losses, damages or liabilities which may be
incurred by the Mortgagee by reason of the covenants and conditions contained
herein, in the Loan Agreements or in the other Security Documents, together
with interest thereon as herein or therein provided, and confirms that such
obligations are secured by this Mortgage.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations and Warranties of the Shipowner.
The Shipowner hereby represents and warrants to the Mortgagee as
follows:
(a) The Shipowner (i) is a company duly formed, validly existing
and in good standing under the laws of The Bahamas and (ii) is duly
authorized, to the extent necessary, to do business in each jurisdiction where
the character of its properties or the nature of its activities makes such
qualification necessary. The Shipowner has not engaged in any business or
activity other than as set forth in Section 5.04 of the Loan Agreements. The
Shipowner has all requisite corporate power and authority to own and operate
the property it purports to own and to carry on its business as now being
conducted and as proposed to be conducted in respect of the Vessel.
(b) The Shipowner has all necessary corporate power and authority
to execute, deliver and perform under this Mortgage, the Loan Agreements and
each other Security Document to which it is a party.
(c) All action on the part of the Shipowner that is required for
the authorization, execution, delivery and performance of this Mortgage, the
Loan Agreements and each other Security Document to which it is a party, in
each case has been duly and effectively taken; and the execution, delivery and
performance of this Mortgage, the Loan Agreements and each such other Security
Document do not require the approval or consent of any Person except for such
consents and approvals as have been obtained on or prior to the date hereof.
(d) This Mortgage, the Loan Agreements and each other Security
Document to which the Shipowner is a party have been duly executed and
delivered by the Shipowner. Each of this Mortgage, the Loan Agreements and
each other Security Document to which the Shipowner is a party constitutes a
legal, valid and binding obligation of the Shipowner, enforceable against it
in accordance with the terms thereof, except as such enforceability (i) may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting the enforcement of creditors' rights and
remedies generally and (ii) is subject to general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity
or at law).
(e) Neither the execution, delivery and performance of this
Mortgage, the Loan Agreements or any other Security Document to which the
Shipowner is a party nor the consummation of any of the transactions
contemplated hereby or thereby nor performance of or compliance with the terms
and conditions hereof or thereof (i) contravenes any Requirement of Law
applicable to the Shipowner or to the Vessel, (ii) constitutes a default under
any Security Document or (iii) results in the creation or imposition of any
Liens on the Vessel (other than Permitted Liens) or results in the
acceleration of any obligation.
(f) The Shipowner is in compliance with and not in default under
any and all Requirements of Law applicable to the Shipowner and all terms and
provisions of this Mortgage, the Loan Agreements and all Security Documents.
(g) All Governmental Approvals which are required to be obtained
in the name of the Shipowner in connection with the operation and maintenance
of the Vessel and the execution, delivery and performance by the Shipowner of
this Mortgage have been obtained and are in effect as of the date hereof.
(h) There are no actions, suits or proceedings at law or in equity
or by or before any Governmental Authority now pending against the Shipowner
or the Vessel or, to the best of the Shipowner's knowledge, threatened against
the Shipowner or the Vessel or pending or threatened against any property or
other assets or rights of the Shipowner with respect to the Vessel, this
Mortgage or any other Security Document.
(i) The Shipowner is the sole and lawful owner of the whole of the
Vessel, free from all liens, security interests, mortgages, charges or
encumbrances (other than this Mortgage and Permitted Liens). The Shipowner
shall defend for the benefit of the Mortgagee the title and possession of the
mortgaged property and every part thereof against the claims and demands of
all Persons.
(j) The Shipowner is, by this Mortgage and the recordation
thereof, constituting in favor of the Mortgagee, among other things, all the
rights of a First Preferred Ship Mortgage of the Vessel to secure the due and
punctual payment of all amounts due and to become due to the Mortgagee
pursuant to the terms and conditions of this Mortgage, the Loan Agreements, the
other Security Documents and the documents contemplated hereby and thereby and
the payment of all commissions and fees, costs, charges, expenses,
expenditures and interest owing to the Mortgagee hereunder and thereunder, and
the performance and observance of and compliance with all the covenants,
terms, conditions and provisions of this Mortgage, the Loan Agreements, the
other Security Documents and the documents contemplated hereby and thereby.
(k) No tax deficiencies and no past due obligations exist that
materially affect the operations of the Shipowner, except those contested in
good faith by appropriate proceedings for which adequate reserves with respect
to such claims so contested have been set aside on the books of the Shipowner.
(l) The Shipowner is not liable for any material amount of sales,
use or other similar tax in connection with the transactions described in this
Mortgage, the Loan Agreements and the other Security Documents.
ARTICLE IV
COVENANTS
So long as any of the Indebtedness is outstanding or any of its
obligations hereunder or under either Loan Agreement remain outstanding, the
Shipowner covenants and agrees, subject to Section 6.01, with the Mortgagee as
follows:
Section 4.01 Payment of Indebtedness.
The Shipowner shall repay to the Mortgagee the Indebtedness and at
all times shall keep, perform and observe the covenants, conditions and
agreements in this Mortgage and the other Security Documents contained,
expressed or implied on its part to be kept, performed and observed for so
long as any part of the Indebtedness remains outstanding.
Section 4.02 Corporate Existence.
The Shipowner is and shall remain a corporation qualified as a
Foreign Maritime Entity as defined in Chapter 13 of the Liberian Corporation
Business Act of 1977 as amended.
Section 4.03 Insurance.
(a) The Shipowner, at its expense (including payment of all
premiums, costs and club calls, if any) shall effect or cause to be effected
the following insurances and keep the following in full force and effect:
(i) hull and machinery insurance equal to the greater of (i) the
Vessel's full commercial value and (ii) one hundred and fifteen percent
(115%) of the aggregate outstanding principal balance of the Term Loan
and the Serial Loan. Such Hull and Machinery insurance shall include the
"Institute Pollution Hazard Clause" and the "Institute Liner Negligence
and Additional Perils Clause". If the Vessel is laid up in port for an
extended period, then, with the prior written consent of the Mortgagee,
the Shipowner may obtain in lieu of the hull and machinery insurance
referred to in this Section 4.03(a)(i) port risk insurance equal to the
greater of (A) the Vessel's full commercial value or (B) one hundred and
fifteen per cent (115%) of the aggregate outstanding principal balance
of the Term Loan and Serial Loan. Such Port Risk insurance shall be
effected on Institute of London Underwriters "Institute Port Risk
Clauses" or American Institute "Port Risk Endorsement";
(ii) war risk hull and machinery insurance (including risks of
mines) equal to the greater of (A) the Vessel's full commercial value or
(B) one hundred and fifteen percent (115%) of the aggregate outstanding
principal balance of the Term Loan and Serial Loan. Such war risk
insurance shall be effected with a War Risks Association approved by the
Mortgagee or on the full Institute of London Underwriters "Institute War
and Strikes Clauses" or American Institute "Hull War Risks and Strikes
Clauses";
(iii) mortgagee additional perils (oil pollution) insurance in an
amount equal to the aggregate outstanding principal amount of the Term
Loan and the Serial Loan related to the Vessel;
(iv) confiscation and requisition insurance to the extent and in
the circumstances that a prudent shipowner would obtain and maintain
such insurances;
(v) protection and indemnity insurance in the name of the
Shipowner, which shall include freight, demurrage and defense coverage
in an unlimited amount and coverage in respect of pollution risks for a
minimum of five hundred million dollars ($500,000,000) plus an
additional two hundred million dollars ($200,000,000) or such other
amount as may be then customary for prudent shipowners to maintain,
including coverage against liabilities to persons who have suffered any
loss, damage or injury whatsoever in connection with anything done or
not done by the Vessel, any charterer or the Shipowner in connection
with the Vessel or the employment or use thereof (including in
connection with any oil or other substance emanating from the Vessel or
any other vessel with which the Vessel may be involved in collision) and
against liability under the United States Oil Pollution Act of 1990
("OPA") or any re-enactment or modification thereof under the law of any
country into whose jurisdiction the Vessel is permitted to come under
the terms of the related charter;
(vi) such additional insurance as the Shipowner may deem
necessary; provided, however, that all such additional insurance,
including without limitation "disbursements," "increased value" or other
"total loss only" insurance shall not be in amounts in excess of those
permitted by the hull and machinery or war risk policies. Such hull and
machinery insurance shall be effected on Institute of London
Underwriters "Institute Time Clause - (Hulls)" or American Institute
"Time (Hulls) Clauses" including four-fourths (4/4ths) Running Down
Clause, except that three-fourths (3/4ths) Running Down Clause is
allowed provided the remaining one-fourth (1/4th) Running Down Clause is
fully covered by protection and indemnity insurance;
(vii) risks which are likely to arise due to the particular usage
and trading of the Vessel including all risks customarily and usually
covered by prudent shipowners; and
(viii) risks for which the Republic of Liberia may from time to
time require insurance or for which the Mortgagee may from time to time
(after receiving advice from its insurance advisers that a prudent
shipowner would obtain and maintain a type and amount of insurance for
such risks) require insurance.
Provided, however, that if the Vessel is subject to the Initial Charter
or an Acceptable Replacement Charter, the insurance requirements related to
the Initial Charter or Acceptable Replacement Charter will supersede the above
insurance requirements.
(b) All insurance taken out or effected in connection with the
Vessel pursuant to the provisions of Section 4.03(a) hereof shall be in a form
and upon terms acceptable to the Mortgagee and shall, without limitation, be
subject to the following:
(i) all such insurance shall be taken out in the name of the
Shipowner (other than Section 4.03(a)(v)) with the Mortgagee's interest
noted on the policies and cover notes;
(ii) all such insurance shall be placed in the English or
American markets through first-class brokers and with first-class
underwriters, insurance companies, protection and indemnity associations
or protection and indemnity clubs. All insurance policies or entries
shall provide that they are payable in Dollars. All insurance policies
shall be valued policies and none shall provide for a deductible amount
in excess of One Hundred Thousand United States Dollars (US$100,000) or
such other amount as prudent shipowners of vessels similar to the Vessel
shall maintain. No insurance shall exclude liability for negligence of
the master, officers, crew or pilots. Each policy or entry shall contain
or be accompanied by a waiver, as against the Mortgagee, of any and all
premiums and calls for which the Mortgagee might otherwise be or become
liable as a loss payee or otherwise.
(iii) Each policy shall provide that it may not lapse, be
terminated, cancelled or materially modified without fourteen (14) days'
prior telex or telegraphic notice to the Mortgagee and any assignee,
except only such notice as war risk underwriters shall be required to
give pursuant to the automatic termination clause of current war risk
policies.
(iv) Each policy shall include a provision agreeing that no
breach of warranty or condition or want of due diligence on the part of
the Shipowner or any agent of such Shipowner shall defeat recovery of
any claim by the Collateral Trustee unless such provision shall conflict
with the available reinsurance arrangements of the issuers of such
policy.
(c) Each insurance policy taken out pursuant to Sections
4.03(a)(i) through (iii) and Section 4.03(a)(v) through (vii) shall contain
the following notice of assignment and loss payable clause:
Notice of Assignment/Loss Payable Clause
California Petroleum Transport Corporation, as mortgagee
(the "Mortgagee"), and CalPetro Tankers (Bahamas III) Limited (the
"Shipowner"), owner of the m.t. William E. Crain (the "Vessel"),
hereby give notice that by an assignment contained in an
Assignment of Earnings and Insurances, dated as of _________ __,
1994, between the Shipowner and the Mortgagee, the Shipowner
assigned to the Mortgagee as mortgagee of the Vessel, inter alia,
all of its right, title and interest under, to and in all policies
and contracts of insurance of whatsoever nature and all entries
with protection and indemnity clubs or societies now or hereafter
taken out in respect of the Vessel, its rights, disbursements,
profits or otherwise.
All claims payable shall be subject to the following
conditions:
(i) Any claim payable in respect of an actual or
constructive or arranged or agreed or compromised total loss,
or loss in the event of the confiscation, compulsory
acquisition or requisition of the Vessel, for title or use, by
any government of any country or any department, agency or
representative thereof, pursuant to any present or future law,
proclamation, order, decree or otherwise, shall be payable to
the Mortgagee as mortgagee of the Vessel, provided always that
the written consent of the Mortgagee shall be obtained prior to
the arranged or agreed or compromised total loss being agreed
with the underwriters (insurers);
(ii) All other claims shall be released to the repairer or
salvor for the repair, salvage or other charges involved or to the
Shipowner as reimbursement if it has fully repaired the damages
and paid all of the salvage and other charges;
Notwithstanding the foregoing, if there exists an Event of Default
under the First Preferred Ship Mortgage, dated _________ __, 1994,
on the Vessel given by the Shipowner in favor of the Mortgagee and
the brokers and/or underwriters (insurers) have been so notified
by the Mortgagee, all claims shall be payable to the Mortgagee as
mortgagee of the Vessel.
The underwriters (insurers) agree that the Mortgagee shall
be advised immediately of the variation or termination of this
policy (entry), and in the event of any failure by the Shipowner to
pay premiums (dues or Club calls) as and when due the Mortgagee
shall be given at least fourteen (14) days' prior telegraphic or
telex notice of the cancellation or material alteration of this
policy (entry).
The Mortgagee shall have no obligations whatsoever to pay
any premiums or costs (dues or Club calls), but shall have the
right to do so in the event of non-payment by the Shipowner. The
underwriters (insurers) shall promptly advise the Mortgagee of any
act of omission of which the Underwriters (insurers) are aware that
might void this policy (entry) or make the same invalid or
unenforceable in whole or in part.
(d) Each entry or insurance policy taken out pursuant to Section
4.01(a)(iv) shall bear the following Endorsement:
Endorsement
California Petroleum Transport Corporation, as mortgagee
(the "Mortgagee") and CalPetro Tankers (Bahamas III) Limited (the
"Shipowner"), owner of the m.t. William E. Crain (the "Vessel"),
hereby give notice that by an assignment contained in an
Assignment of Earnings and Insurances, dated as of _________ __,
1994, between the Shipowner and the Mortgagee, the Shipowner
assigned to the Mortgagee as mortgagee of the Vessel all of its
right, title and interest under, to and in all policies and
contracts of insurance of whatsoever nature and all entries with
protection and indemnity clubs or societies now or hereafter taken
out in respect of the Vessel, its rights, disbursements, profits
or otherwise.
It is hereby noted that all claims shall be paid to the
Shipowner unless and until the Mortgagee shall have given
notice in writing that the Shipowner is in default under the
First Preferred Ship Mortgage, dated _________ __, 1994, on the
Vessel given by the Shipowner in favor of the Mortgagee in
which event such claims shall be payable to the Mortgagee as
mortgagee of the Vessel. Any modification of the terms of this
insurance or cancellation or termination by reason of
nonpayment of premiums, dues, assessments, contributions or
other amounts which may become due shall not become effective
against the interests of the Mortgagee, its successors or
assigns until fourteen (14) days' prior telegraphic or telex
notice is given to the Mortgagee, its successors or assigns of
such modification, cancellation or termination.
(e) Certified copies of all binders and cover notes or other
satisfactory written evidence showing that the required insurance of each type
has been placed, maintained or renewed and that the premiums thereon have been
paid shall be submitted to the Mortgagee on or before the date of this
Mortgage and subsequently pro forma policies shall be submitted for approval
at least seven (7) days before liability under any current or renewed
insurance expires. No change shall be made in any insurance without the prior
written approval of the Mortgagee. Certified copies of all policies,
certificates of entry, contracts of insurance, cover notes and renewals
thereof shall be delivered to and held by the Mortgagee, and the Shipowner
shall furnish the Mortgagee with the original of the policies, when and if
requested by the Mortgagee. On the Closing Date, on each date the Insurances
are renewed as required by the terms hereof and each time there is a
significant change in the insurance coverage carried on the Vessel, the
Shipowner shall arrange for a detailed report signed by independent marine
insurance brokers acceptable to the Mortgagee, describing the insurance
coverage then carried and maintained on the Vessel (including the types of
risk covered by such policies, the amount insured thereunder and the
expiration date thereof) and stating that in the opinion of said insurance
brokers such insurance is adequate and reasonable for the protection of the
Mortgagee and that the Shipowner is in compliance with the insurance terms
hereof.
(f) The Mortgagee is hereby authorized, but not required, in its
own name and/or the Shipowner's name to demand, collect, give receipt for and
prosecute all necessary actions in the courts to recover any and all insurance
monies which may become due and payable to the Shipowner under any insurance
required or permitted hereunder.
(g) If the Shipowner shall at any time fail to pay or to cause
to be paid when due any insurance premiums, club calls or other costs related
to obtaining or maintaining the insurance required hereunder, or to obtain any
required insurance or to deliver to the Mortgagee all policies, certificates
of entry, contracts of insurance, binders and cover notes and all renewals
thereof as required by the provisions of this Mortgage, the Mortgagee may, but
shall not be required to, procure such insurances and/or pay unpaid premiums
and other costs, and the cost and expense thereof, with interest at the
Default Rate, shall be an indebtedness due from the Shipowner to the Mortgagee
secured by this Mortgage and shall be paid by the Shipowner promptly on demand.
(h) The Shipowner shall cause each of its insurance brokers to
deliver to the Mortgagee its undertaking substantially in the form of the
letter attached hereto as Exhibit A and made a part hereof.
(i) The Shipowner shall not do any act or cause or permit any
act to be done whereby any insurance shall be or may be suspended, impaired or
defeated.
(j) The Shipowner agrees to do all such things whatsoever and
prepare, execute and deliver all such documents whatsoever to enable the
Mortgagee to collect and recover any monies which may become due in respect of
the policies of insurance and entries and for that purpose (but without
limitation) to permit the Mortgagee if necessary to sue in the name of the
Shipowner.
(k) The Shipowner agrees not to employ the Vessel or suffer the
Vessel to be employed otherwise than in conformity with the terms of the
instruments of insurance aforesaid (including any warranties express or
implied therein) without first obtaining the consent to such employment of the
insurers and complying with such requirements as to extra premium or otherwise
as the insurers may prescribe.
(1) The proceeds of any Insurances or entries shall be applied
as follows:
(i) Until the occurrence of an Event of Default:
(A) Any claim under any Insurances (other than in respect
of a Total Loss) or whether or not such claim is under
the terms of the relevant loss payable clause payable
directly to the Shipowner, shall be applied by the
Shipowner in making good the loss or damage in respect
of which it has been paid to the Shipowner in
reimbursement of money expended by it for such
purpose; and
(B) Any claim in respect of protection and indemnity
insurance shall be paid directly to the person, firm
or company to which the liability covered by such
insurance was incurred or the Shipowner in
reimbursement of moneys expended by it in satisfaction
of such liability;
provided always that for as long as the Initial Charter in respect
of the Vessel remains in force, all payments other than in respect
of a Total Loss (which shall be made to the Mortgagee) shall be
made to the Initial Charterer.
(ii) Upon the occurrence of an Event of Default, subject as
provided above, any claim under any such insurance and entry shall be paid to
the Mortgagee, as assignee of the related Shipowner, and shall be applied by
the Mortgagee pursuant to the terms of the Initial Charter unless the Initial
Charterer is in default thereunder in which event the Mortgagee shall apply
such proceeds against payment of the Obligations.
(iii) Any claim under such insurance and entry in respect of a
Total Loss shall be paid to the Mortgagee, as assignee of the related
Shipowner, and shall be applied by the Mortgagee, after payment of the costs
of collecting such claim, as follows:
First: To the payment of all reasonable expenses and
charges, including the expenses of any taking, attorney's fees,
court costs and any other expenses or advances made or incurred by
the Mortgagee in the protection of its right or the pursuance of
its remedies under this Mortgage, the Loan Agreements or the other
Security Documents;
Second: To the payment of all amounts due to the Mortgagee
in respect of taxes, indemnities, fees, expenses, premiums,
purchase of liens or otherwise under the provisions of this
Mortgage;
Third: To the payment of interest on the Term Loan and
Serial Loan, pro rata, in accordance with their respective
outstanding balances, to but not including the Loss Date;
Fourth: To the payment to the Mortgagee in respect of
principal of the Term Loan and Serial Loan, pro rata, in
accordance with their respective outstanding balances; and
Fifth: To the payment of any surplus thereafter remaining
to the Shipowner or whomsoever may be lawfully entitled thereto.
Section 4.04 Defense of Title.
The Shipowner lawfully owns and is lawfully possessed of the
Vessel free from any Lien whatsoever except this Mortgage and Permitted Liens
and shall warrant and defend the title and possession thereto and to every
part thereof for the benefit of the Mortgagee against the claims and demands
of all persons whomsoever.
Section 4.05 Discharge of Liens.
The Shipowner shall pay and discharge or cause to be paid and
discharged when due and payable unless contested in good faith from time to
time all debts, damages and liabilities whatsoever which may have given or may
give rise to maritime or possessory liens on or claims enforceable against the
Vessel and all taxes, assessments, governmental charges, fines and penalties
legally imposed on the Vessel or any income or proceeds therefrom or on the
Shipowner, the Earnings and in event of arrest of the Vessel pursuant to legal
process or in event of her detention in exercise or purported exercise of any
such lien as aforesaid to procure the release of the Vessel from such arrest
or detention as soon as possible upon receiving notice thereof but in any
event within fifteen (15) days of receiving such notice by providing bail or
otherwise as the circumstances may require.
Section 4.06 Liens.
(a) Neither the Shipowner nor its agent nor the master of the
Vessel nor any charterer of the Vessel has or shall have any right, power or
authority to create, incur or permit to be placed or imposed upon the property
or any part thereof subject or intended to be subject to this Mortgage, any
liens whatsoever without the prior written consent of the Mortgagee, other
than for Permitted Liens. A properly certified copy of this Mortgage shall be
carried with the ship's papers on board the Vessel, shall be exhibited to any
person having business with the Vessel which might give rise to any lien other
than Permitted Liens and shall be exhibited to any representative of the
Mortgagee on demand.
(b) The Shipowner shall keep the Vessel free and clear of all
liens, security interests, charges or encumbrances (except for the Initial
Charter and Permitted Liens).
Section 4.07 Use of Vessel.
(a) The Shipowner shall not cause or permit the Vessel to be
operated in such a way as to jeopardize the safety of the Vessel, its
Insurances or in any manner contrary to law, shall not engage in any unlawful
trade or violate any applicable law, rule or regulation of the Republic of
Liberia or any other jurisdiction in which the Vessel may operate from time to
time or which may otherwise be applicable to the Vessel or the Shipowner or
carry any cargo that shall expose the Vessel to penalty, confiscation,
forfeiture, capture or condemnation, shall not do, suffer or permit to be done
anything which can or may injuriously affect the registration or enrollment of
the Vessel under the laws and regulations of the Republic of Liberia and shall
at all times keep the Vessel duly documented thereunder.
(b) The Shipowner shall not employ the Vessel or suffer her
employment in any trade or business which is forbidden by international law or
is otherwise illicit or in carrying illicit or prohibited goods or otherwise
use the Vessel in any manner whatsoever which renders her liable to
condemnation or to destruction, seizure or confiscation and in event of
hostilities in any part of the world (whether war is declared or not) not
allow the Vessel to enter any zone which is declared a war zone unless the
Mortgagee shall have first given its consent thereto in writing and there
shall have been effected by the Shipowner and at its expense such special
insurance cover as the Mortgagee may require.
(c) The Shipowner shall not, during hostilities (whether or not
a state of war shall have been formally declared) between any two or more
nations or in which the United Nations Organization may be involved, or during
any civil war, employ or permit the Vessel to be employed in any manner in
carrying any goods that shall or may be declared to be contraband of war or
that shall or may render her liable to confiscation, seizure, detention or
destruction unless prior to such employment special war risks policies
effected with such underwriters as the Mortgagee may approve and in all
respects to the satisfaction of the Mortgagee shall have been effected,
assigned and delivered to the Mortgagee.
(d) Upon request, the Shipowner shall give to the Mortgagee all
information regarding the Vessel, her position and engagements in the
possession of or available to the Shipowner.
(e) The Shipowner shall comply with and satisfy all of the
material provisions of any applicable law, regulation, proclamation or order
concerning financial responsibility for liabilities imposed on the Shipowner
or the Vessel with respect to pollution by any state or nation or political
subdivision thereof, including, if applicable, the United States Federal Water
Pollution Control Act, OPA and the United States Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), as any of the foregoing
may at any time be amended, and shall maintain all certificates or other
evidence of financial responsibility as may be required by any such law,
regulation, proclamation or order with respect to the trade in which the
Vessel is from time to time engaged and the cargo carried by it and shall upon
request, furnish the Mortgagee with evidence that the Shipowner has acted in
compliance with OPA and CERCLA.
Section 4.08 Notifications.
The Shipowner shall immediately notify the Mortgagee of:
(a) any marine disaster involving the Vessel that has occurred,
or any serious damage suffered by the Vessel (such notice by the
Shipowner to be given within twenty-four (24) hours after the event shall
have come to its knowledge and shall furnish the Mortgagee with full
information regarding any loss of life, other accidents or damage to the
Vessel), and in such event the Mortgagee shall have the right to have an
independent survey of the damage to the Vessel at the Shipowner's
expense provided that the same shall not cause any undue delay in
respect of the operation of the Vessel, and if such survey be requested,
the Shipowner shall lend all needed assistance.
(b) any occurrence in consequence whereof the Vessel has become
or is likely to become a Total Loss;
(c) any requirement or recommendation made by any insurer or
classification society or by any competent authority that is not
complied with immediately; and
(d) any complaint or libel filed against the Vessel, or any levy
against the Vessel, or the fact that the Vessel has been taken into
custody or detained by any proceedings in any court or tribunal or by
any government of any country or other authority, any arrest of the
Vessel or the exercise or purported exercise of any lien on the Vessel.
Section 4.09 Payment of Crew's Wages and Allotments.
The Shipowner shall promptly pay all tolls, dues and other
outgoings whatsoever in respect of the Vessel and, as and when the Mortgagee
may so require, furnish satisfactory evidence that the wages and allotment and
insurance and pension contributions of the Master and crew are being regularly
paid and that all deductions from crew's wages in respect of any tax liability
are being properly accounted for.
Section 4.10 Charter of Vessel.
The Shipowner shall not, without the prior written consent of the
Mortgagee, charter the Vessel by demise charter or by period, time or voyage
charter for any period other than to the Initial Charterer under the Initial
Charter or any other charterer under an Acceptable Replacement Charter. The
Shipowner shall not modify, amend or supplement the terms of the Initial
Charter without the prior written consent of the Mortgagee.
Section 4.11 Maintenance of Vessel.
The Shipowner shall at all times and without cost or expense to
the Mortgagee or the Collateral Trustee maintain and preserve, or cause to
be maintained and preserved, the Vessel, her equipment and machinery in
good running order and repair so that the Vessel shall be, in so far as due
diligence can make her so, tight, staunch, strong and well and sufficiently
tackled, apparelled, furnished, equipped and in every respect seaworthy and
in good operating condition as will entitle her to the highest
classification of the Classification society or such other classification
society of like standing agreeable to the Mortgagee and the Collateral
Trustee. The Vessel shall, and the Shipowner covenants that it shall, at
all times comply strictly with all applicable laws, treaties and
conventions of the Republic of Liberia and rules and regulations issued
thereunder and shall have on board as and when required by such rules and
regulations valid certificates showing compliance therewith. The Shipowner
shall not make or permit to be made any substantial change in the
structure, type or speed of the Vessel or change in any of her rigs without
first obtaining the written approval of the Mortgagee. The Shipowner shall
cause all repairs to and/or replacements of any damaged, worn or lost parts
or equipment of the Vessel be effected in such manner both as regards
workmanship and quality of materials so as not to diminish the value or
class of the Vessel. The Shipowner shall submit the Vessel to such
periodical or other surveys as may be required for classification purposes
and shall if so required by the Mortgagee supply to the Mortgagee on
request copies of all surveys or reports issued in respect thereof.
Section 4.12 Statement of Classification Society.
The Shipowner shall furnish to the Mortgagee and the Collateral
Trustee annually from the date hereof a certificate by Det norske Veritas or
such other classification society acceptable to the Mortgagee and the
Collateral Trustee that such classification is maintained in the highest
category for ships of the same type as the Vessel free of recommendations and
notations which have not been complied with in accordance with their terms and
to furnish the Mortgagee from time to time and at any time upon demand with
all such information and copies of all such documents as the Mortgagee may
require concerning the classification of the Vessel.
Section 4.13 Surveys of Vessel.
The Shipowner shall submit the Vessel or cause the Vessel to be
submitted regularly to such periodical or other surveys as may be required for
classification purposes and if so required supply and cause to be supplied to
the Mortgagee copies of all survey reports issued in respect thereof.
Section 4.14 Access to Vessel.
The Shipowner shall use all reasonable endeavors to afford the
Mortgagee and such Persons as the Mortgagee shall from time to time appoint
for that purpose full and complete access to the Vessel at any time, on
reasonable notice and in a manner which shall not interfere with the Vessel's
trading requirements to view the state and condition thereof and her cargo and
papers and to ascertain whether the Vessel is being properly repaired and
maintained, and if default shall be made in keeping her in such good state of
repair and in such working order and condition as herein mentioned (without
prejudice however to any of the Mortgagee's rights under this Mortgage) the
Mortgagee may (but shall not be obligated to) effect such repairs as shall in
its opinion be necessary, and the Shipowner shall on demand repay to the
Mortgagee every sum of money expended for the above purpose with interest at
the Default Rate.
Section 4.15 Books and Records.
The Shipowner shall keep proper books of account in respect of the
Vessel and as and when required by the Mortgagee make such books available for
inspection for the Mortgagee and any Noteholder.
Section 4.16 Registration of Mortgage; Recordation of Mortgage.
(a) The Shipowner shall not change the flag or port of
documentation of the Vessel or through any action or inaction cause the
registration of the Vessel under the laws of the Republic of Liberia to be
void or voidable or to lapse; and
(b) The Shipowner shall cause this Mortgage to be recorded with
the Deputy Commissioner for Maritime Affairs of the Republic of Liberia as
prescribed by Chapter 3 of Title 22 of the Liberian Code of Laws of 1956 as
amended and otherwise comply with and satisfy all the requirements and
formalities established by the said Liberian Code of Laws and any other
pertinent legislation of the Republic of Liberia to perfect this Mortgage as a
valid and enforceable first and preferred lien upon the Vessel and shall
furnish to the Mortgagee from time to time such evidence to the Mortgagee's
satisfaction with respect to the Shipowner's compliance with the provisions of
this Section.
Section 4.17 Notice of Mortgage.
(a) The Shipowner shall at all times carry on board the Vessel a
duly certified copy of this Mortgage and any assignment thereof (which shall
form a part of the Vessel's papers) and cause the same to be shown to any
person having business with the Vessel which might create or imply any
commitment or encumbrance whatsoever on the Vessel and place and maintain in a
frame in a conspicuous place in the navigation room and in the cabin of the
Master of the Vessel a printed notice such that the printed area covers a
space not less than six inches wide by nine inches high in the following form:
"NOTICE OF FIRST MORTGAGE"
"This Vessel is owned by CalPetro Tankers (Bahamas III) Limited
and is subject to a First Preferred Mortgage in favor of California
Petroleum Transport Corporation, as mortgagee. Under the terms of
the Mortgage, neither the Shipowner nor any charterer nor the
master of this Vessel nor any other person has any power, right or
authority whatever to create, incur or permit to be imposed on this
Vessel any lien or encumbrance except for Master's and crew's
wages for not more than three (3) months and salvage."
(b) Notwithstanding the requirement for the Shipowner to
maintain the Notice of Mortgage described in Section 4.17(a), so long as the
Initial Charter is in effect, the Shipowner shall maintain the Notice of First
Mortgage described in Clause 14 of the Initial Charter.
Section 4.18 Further Assurances.
(a) The Shipowner shall pay to the Mortgagee on demand on a full
indemnity basis all moneys whatsoever which the Mortgagee shall or may expend,
be put to or become liable for in or about the protection maintenance or
enforcement of the security created by this Mortgage and the other Security
Documents or in or about the exercise by the Mortgagee of any of the powers
vested in the Mortgagee hereunder or thereunder including any and all costs,
charges, legal fees and expenses of the Mortgagee and shall pay interest
thereon at the Default Rate until the date of repayment by the Shipowner both
before and after judgment.
(b) The Shipowner shall do and permit to be done each and every
act or thing whatsoever which the Mortgagee may require to be done for the
purpose of enforcing the Mortgagee's rights hereunder and to allow the
Mortgagee to use the Shipowner's name as may be required for that purpose.
Section 4.19 Withholding Tax.
The Shipowner shall take any lawful action to the extent necessary
to prevent or avoid the imposition of any withholding taxes (other than any
withholding tax with respect to charter hire to the extent required to be paid
or reimbursed by any charterer pursuant to a charter) by any taxing
jurisdiction (including The Bahamas) with respect to any payments under the
Obligations, including changing its jurisdiction of incorporation or
residence; provided, however, that it shall not be required to take, or fail to
take, any action (i) if in the opinion of counsel such act or failure to act
would violate applicable law or (ii) if in the reasonable opinion of the
Shipowner the actions necessary to avoid or prevent imposition of such
withholding taxes would be unduly burdensome. For purposes of clause (ii) of
this paragraph a requirement to change the jurisdiction of the Shipowner's
incorporation or residence shall not be treated as unduly burdensome.
Section 4.20 Expenses.
The Shipowner shall upon demand pay to the Mortgagee (or as it may
direct) the amount of all investigation expenses, mortgage taxes, recording
charges, filing fees, revenue and documentary stamps and any other charges
incurred by the Mortgagee in connection with the preparation, completion or
registration of this Mortgage, including without limitation the reasonable
expenses and fees of counsel to the Mortgagee. Likewise any and all expenses
incurred at any time by the Mortgagee with respect to the mortgaged property
or the protection or the enforcement of its rights hereunder or thereunder,
including without limitation the expenses and fees of counsel to the
Mortgagee, shall be paid by the Shipowner or, if paid by the Mortgagee, shall
be paid by the Shipowner promptly upon demand together with interest thereon
from the date of demand until such repayment at the Default Rate in effect
from time to time. The payment of all expenses and other amounts under this
Section 4.20 shall be secured by this Mortgage and no amounts payable by the
Shipowner to the Mortgagee under this Section 4.20 shall in any circumstances
be repayable to the Shipowner.
Section 4.21 Indebtedness.
The Shipowner will not directly or indirectly, create, incur,
issue, assume, guarantee or otherwise become directly or indirectly liable
with respect to, or become responsible for the payment of, any indebtedness,
except for the obligations under the Shipowner's Loan Agreements.
Section 4.22 Business of Shipowner.
The Shipowner will not engage in any business other than the
ownership and operation of its Vessel as described herein and in accordance
with the Shipowner's charter and by-laws.
Section 4.23 No Bankruptcy Petition.
The Shipowner will not (i) commence any case, proceeding or other
action under any existing or future bankruptcy, insolvency or similar law
seeking to have an order for relief entered with respect to it, or seeking
reorganization, arrangement, adjustment, winding up, liquidation, dissolution,
composition or other relief with respect to its debt, (ii) seek appointment
of a receiver, trustee, custodian or other similar official for it or any part
of its assets, (iii) make a general assignment for the benefit of creditors or
(iv) take any action in furtherance of, or consenting or acquiescing in, any
of the foregoing.
Section 4.24 Restricted Payment.
The Shipowner shall not consolidate with, merge with or into, any
other Person or convey or transfer to any Person all or any part of the Vessel.
Section 4.25 Loans, Advances and Other Liabilities.
The Shipowner will not make any capital contributions, advances or
loans to, or investments or purchases of capital stock in, any Person, except
for Allowable Investments.
Section 4.26 Restricted Payment.
The Shipowner will not make any Restricted Payment except as set
forth in the Loan Agreements.
ARTICLE V
EVENTS OF DEFAULT; REMEDIES
Section 5.01 Events of Default.
The following shall constitute Events of Default hereunder:
(a) An Event of Default shall occur under either the Serial Loan
Agreement, the Term Loan Agreement or any Other Loan Agreement;
(b) Default in the payment of any sums payable under the Mortgage to
the Mortgagee within two (2) Business Days after such amount was
due;
(c) Default by the Shipowner in the due observance or performance of
any covenant set forth in Sections 4.02, 4.03, 4.04, 4.06, 4.10,
4.16 and 4.26;
(d) Default in any material respect in the performance, or breach in
any material respect, of any covenant of the Shipowner (other than
Sections 4.02, 4.03, 4.04, 4.06, 4.10, 4.16 and 4.26) or if any
representation or warranty of the Shipowner made in the Mortgage
or in any certificate or other writing delivered pursuant thereto
or in connection therewith with respect to or affecting the Vessel
shall prove to be inaccurate in any material respect as of the
time when the same shall have been made, and, if such breach or
default or inaccuracy is curable, continuance of such default or
breach or inaccuracy for a period of 30 days after the earlier to
occur of (a) actual knowledge of such default, breach or inaccuracy
by the Shipowner or (b) the date on which there has been given by
registered or certified mail to the Shipowner by the Mortgagee a
written notice thereof;
(e) The entry of a decree or order for relief by a court having
jurisdiction over the Shipowner and its assets in any involuntary
case under any applicable federal or state bankruptcy, insolvency,
or other similar law of any relevant jurisdiction now or hereafter
in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, or sequestrator (or other similar official)
for the Shipowner or for any substantial part of its property, or
ordering the winding up or liquidation of its respective affairs,
and the continuance of any such decree or order unstayed and in
effect for a period of 60 consecutive days;
(f) The commencement by the Shipowner of a voluntary case under any
applicable federal or state bankruptcy, insolvency, or other
similar law of any relevant jurisdiction now or hereafter in
effect in any jurisdiction, or the consent by the Shipowner to the
appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee or sequestrator (or other similar
official) of the Shipowner or any substantial part of its
property, or the making by the Shipowner of any general assignment
for the benefit of creditors, or the failure by the Shipowner
generally to pay its debts as they become due, or the taking of
action by the Shipowner in furtherance of any such action;
(g) The Vessel is deemed a Total Loss and the insurance proceeds
thereof have not been received by the Mortgagee within 60 days
after the date on which the Vessel was deemed a Total Loss;
provided, however, if the Vessel is under charter to the Charterer
pursuant to the Charter, such an event shall be an Event of Default
under this Mortgage if the Mortgagee has not received the amount
payable by the Charterer in the event of a Total Loss pursuant to
the Charter within 5 business days of the date on which such
amounts are due pursuant to the Charter;
(h) The Shipowner shall abandon the Vessel;
(i) A default (as described in Clause 18 of the Initial Charter) shall
have occurred under the Initial Charter; or
(j) This Mortgage or any material provision hereof shall be deemed
invalidated in whole or in part by any present or future law of
the Republic of Liberia or decision of any competent court.
Section 5.02 Remedies.
In the event any one or more Events of Default shall have occurred
and be continuing, then, in each and every such case the Mortgagee shall have
the right to:
(a) declare immediately due and payable all of the Obligations (in
which case all of the same shall be immediately due), and bring
suit at law, in equity or in admiralty, as it may be advised, to
recover judgment for the Obligations and collect the same out of
any and all property of the Shipowner whether covered by the
Mortgage or otherwise;
(b) exercise all of the rights and remedies in foreclosure and
otherwise given to mortgagees by the provisions of applicable law;
(c) take and enter into possession of the Vessel, at any time,
wherever the same may be, without court decision or other legal
process and without being responsible for loss or damage and the
Mortgagee may, without being responsible for loss or damage, hold,
lay-up, lease, charter, operate or otherwise use such Vessel for
such time and upon such terms as it may deem to be for its best
advantage, and demand, collect and retain all hire, freights,
earnings, issues, revenues, income, profits, return premiums,
salvage awards or recoveries, recoveries in general average, and
all other sums due or to become due in respect of such Vessel or in
respect of any insurance thereon from any person whomsoever,
accounting only for the net profits, if any, arising from such use
of the Vessel and charging upon all receipts from use of the
Vessel or from the sale thereof by court proceedings or by private
sale all costs, expenses, charges, damages or losses by reason of
such use, and if at any time the Mortgagee avails itself of the
right given to it to take the Vessel: (i) the Mortgagee shall have
the right to dock the Vessel for a reasonable time at any dock,
pier or other premises of the Shipowner without charge, or to dock
her at any other place at the cost and expense of the Shipowner,
and (ii) the Mortgagee shall have the right to require the
Shipowner to deliver, and the Shipowner shall on demand, at its
own cost and expense, deliver to the Mortgagee the Vessel as
demanded; and the Shipowner shall irrevocably instruct the master
of the Vessel so long as the Mortgage is outstanding to deliver
the Vessel to the Mortgagee as demanded;
(d) sell the Vessel or any share therein with or without the benefit
of any charter party or other engagement by public auction or
private contract without legal process at any place in the world
and upon such terms as the Mortgagee in its absolute discretion
may determine with power to postpone any such sale and without
being answerable for any loss occasioned by such sale or resulting
from the postponement thereof and at any such public auction the
Mortgagee may become the purchaser and shall have the right to set
off the purchase price against the Obligations;
(e) to require that all policies, contracts and other records relating
to the Insurance (including details of and correspondence
concerning outstanding claims) be forthwith delivered to such
brokers as the Mortgagee may nominate;
(f) to collect, recover, compromise and give a good discharge for all
claims then outstanding or thereafter arising under any of the
Insurance and to take over or institute (if necessary using the
name of the Shipowner) all such proceedings in connection
therewith as the Mortgagee in its absolute discretion thinks fit
and to permit the brokers through whom collection or recovery is
effected to charge and retain the usual brokerage therefor;
(g) to discharge, compound, release or compromise claims in respect of
the Vessel which have given or may give rise to any charge or lien
on the Vessel or which are or may be enforceable by proceedings
against the Vessel under the laws of all countries to whose
jurisdiction the Vessel may from time to time become subject;
(h) pending sale of the Vessel to remove the Vessel or to require the
Vessel to be removed from any place where she may be or be lying
to any port, harbor, dock or other location for the purposes of
the Vessel docking, laying up, repair, management, employment,
maintenance, or sale or to preserve or maintain the Mortgagee's
security in the Vessel in such manner as the Mortgagee may in its
complete discretion deem necessary;
(i) to discharge, store, load, tranship and otherwise handle any cargo
for the time being on board the Vessel without liability to any
third party with regard thereto;
(j) pending sale of the Vessel to manage, insure, maintain and repair
the Vessel and to hold, lease, charter, operate, employ, lay up or
otherwise use the Vessel in such manner and for such period as the
Mortgagee in its absolute discretion deems expedient accounting
only for the net profits (if any) of such use and for the purposes
aforesaid the Mortgagee shall be entitled to do all acts and
things incidental or conducive thereto and in particular to
enter into such arrangements respecting the Vessel, her
insurance, management, maintenance, repair, classification and
employment and generally to do and cause to be done all such
acts and things whatsoever and to make all such arrangements
whatsoever in respect of the Vessel or the working of the same
in all respects as if the Mortgagee were the absolute and sole
owner of the Vessel and without being responsible for any loss
and damage thereby incurred; and
(k) to recover from the Shipowner on demand all expenses, payments,
disbursements, costs, losses and damages as may be incurred by the
Mortgagee whether the Mortgagee be in possession of the Vessel or
not or in exercise by the Mortgagee of any of the powers herein
contained together with interest thereon at the Default Rate and
such expenses, payments, disbursements, costs, losses and damages
together with the said interest thereon shall, until paid by the
Shipowner to the Mortgagee, be secured on the Vessel by this
Mortgage.
Section 5.03 Sale of the Vessel.
(a) A sale of the Vessel made in pursuance of this Mortgage
whether under the power of sale hereby granted or any judicial proceedings
shall operate to divest all right, title and interest of any nature whatsoever
of the Shipowner herein and thereto and shall bar the Shipowner, its
successors and assigns and all persons claiming by, through or under them
provided such sale is by auction and that nothing herein shall be deemed to
derogate from the Shipowner's duty to the Mortgagee. Upon any such sale, the
purchaser shall not be bound to see or inquire whether the Mortgagee's power
of sale has risen in the manner provided by the Mortgage and the sale shall be
within the power of the Mortgagee and the receipt of the Mortgagee for the
purchase money shall effectively discharge the purchaser who shall not be
concerned with the manner of application of the proceeds of sale or be in any
way answerable or otherwise liable therefor. The Mortgagee may bid for and
purchase the Vessel and upon compliance with the terms of sale may hold,
retain and dispose of the Vessel without further accountability therefor.
(b) The Shipowner hereby irrevocably appoints the Mortgagee and
its assigns as its true and lawful attorney with full power to act alone and
with full power of substitution until the due discharge of this Mortgage in
accordance with the laws of the Republic of Liberia to make all necessary
transfers of the Vessel sold pursuant to Section 5.02, including, without
limitation, executing and delivering all instruments of assignment and
transfer or quitclaim as the Mortgagee may require and the Shipowner hereby
does ratify and confirm all that its said attorneys shall lawfully do by
virtue hereof. Nevertheless, the Shipowner shall if so requested by the
Mortgagee ratify and confirm any such sale by executing and delivering to the
purchaser or purchasers of the Vessel such proper bills of sale, conveyances,
instruments of assignment and transfer or quitclaim and releases as may be
designated in such request.
Section 5.04 Mortgagee as Attorney-in Fact.
The Mortgagee is hereby appointed attorney-in-fact of the
Shipowner and upon the Indebtedness becoming due and payable in the name of
the Shipowner to demand, collect, receive, compromise and sue for so far as
may be permitted by law all freights, hire, earnings, issues, revenues, income
and profits of the Vessel and all amounts due from underwriters under any
insurance thereon as payment of losses or as return premiums or otherwise
salvage awards and recoveries in general average or otherwise and all other
sums due or to become due upon the Indebtedness becoming due and payable in
respect of the Vessel or in respect of any insurance thereon from any person
whomsoever and to make and give and execute in the name of the Shipowner
acquittances, receipts, releases or other discharges for the same whether under
seal or otherwise and to endorse and accept in the name of the Shipowner all
checks, notes, drafts, warrants, agreements and all other instruments in
writing with respect to the foregoing.
Section 5.05 Appointment of Receiver.
Whenever any right to enter and take possession of the Vessel
accrues to the Mortgagee, the Mortgagee may require the Shipowner to deliver
and the Shipowner shall on demand at its own cost and expense deliver to the
Mortgagee the Vessel as demanded. If any legal proceedings shall be taken to
enforce any right under this Mortgage, the Mortgagee shall be entitled as a
matter of right to the appointment of a receiver of the Vessel and the
freights, hire, earnings, issues, revenues, income and profits due or to
become due and arising from the operation thereof.
Section 5.06 Arrest or Detention of Vessel.
In the event that the Vessel shall be arrested or detained by any
marshal or other officer of any court of law, equity or admiralty jurisdiction
in any country or nation of the world or by any government or other authority
and shall not be released from arrest or detention within fifteen (15) days
from the date of arrest or detention, the Shipowner hereby authorizes and
empowers the Mortgagee, its successors or assigns, to apply for and receive
possession of or to take possession of the Vessel with all the rights and
powers that the Shipowner or its successors or assigns may have, possess and
exercise in any such event, and this power of attorney shall be irrevocable
and may be exercised not only by the Mortgagee but also by an assignee or
appointee of the Mortgagee with full power of substitution to the same extent
and effect as if such assignee or appointee has been named by express
designation.
Section 5.07 Defense of Suits.
The Shipowner also authorizes and empowers the Mortgagee, and its
successors, assigns and appointees, to appear in the name of the Shipowner,
and its successors and assigns, in any court of any country or nation of the
world where a suit is pending against the Vessel because of or on account of
any alleged lien against the Vessel from which the Vessel has not been
released and to take such proceedings and do such things as to them or any of
them may seem proper toward the defense of such suit and the discharge of such
lien, and all monies expended by them or any of them for the purpose of such
defense and/or discharge shall be a debt due from the Shipowner, and its
successors and assigns, to the Mortgagee, and its successors and assigns, and
payment thereof together with interest thereon at the Default Rate (to the
extent permitted by law) from time to time in effect shall be secured by the
lien of this Mortgage in like manner and extent as if the amount and
description thereof were written herein.
Section 5.08 Cumulative Rights, Powers and Remedies.
(a) Each and every right, power and remedy herein given to the
Mortgagee shall be cumulative and shall be in addition to every other right,
power and remedy herein given or now or hereafter existing at law, in equity,
admiralty or by statute and each and every power and remedy whether herein
given or otherwise existing may be exercised from time to time and as often
and in such order as may be deemed expedient by the Mortgagee, and the
exercise or the beginning of the exercise of any right, power or remedy shall
not be construed to be a waiver of the right to exercise at the same time or
thereafter any other power or remedy.
(b) No delay or omission of the Mortgagee to exercise any right
or power vested in it under the Security Documents or any of them shall impair
such right or power or be construed as a waiver of or as acquiescence in any
default by the Shipowner, nor shall the acceptance by the Mortgagee of any
security or any payment on account of the Indebtedness, although made after
default, be deemed a waiver of any right arising out of any future default or
of any past default, and in the event of the Mortgagee at any time agreeing to
waive any such right or power such waiver shall be revocable by the Mortgagee
at any time and the right or power shall henceforth be again exercisable as
though there had been no such waiver.
(c) In the event the Mortgagee shall have proceeded to enforce
any right or pursue any power under this Mortgage by foreclosure, entry or
otherwise and such proceedings shall have been discontinued or abandoned for
any reason, or shall have been determined adversely to the Mortgagee, then and
in every such case the Shipowner and the Mortgagee shall be restored to their
former positions and rights hereunder with respect to the property subject or
intended to be subject to this Mortgage and all rights, remedies and powers of
the Mortgagee shall continue as if no such proceedings had been taken.
Section 5.09 Application of Proceeds.
The proceeds of any sale made either under the power of sale
hereby granted to the Mortgagee or under a judgment or decree in any judicial
proceeding for the foreclosure of this Mortgage or for the enforcement of any
remedy granted to the Mortgagee hereunder, or any net earnings arising from
the management, charter or other use of the Vessel by the Mortgagee under any
of the powers herein reserved, any amounts on deposit to the credit of the
Shipowner or the Mortgagee from earnings of the Vessel as provided herein and
any other moneys received by the Mortgagee pursuant to the terms of this
Mortgage or in any proceeding hereunder other than under Section 4.03(l)(ii),
the application of which is not elsewhere herein specifically provided for,
shall be applied as follows:
First: To the payment of all reasonable expenses and
charges, including the expenses of any taking, attorney's fees,
court costs and any other expenses or advances made or incurred by
the Mortgagee in the protection of its rights or the pursuance of
its remedies under the Loan Agreements or this Mortgage;
Second: To the payment of all amounts due to the Mortgagee
in respect of taxes, indemnities, fees, expenses, premiums,
purchase of liens or otherwise under the provisions of this
Mortgage;
Third: To the payment of interest on the Term Loan and
Serial Loan, pro rata, in accordance with their respective
outstanding balances;
Fourth: To the payment of principal on the Term Loan and
Serial Loan, pro rata, in accordance with their respective
outstanding balances;
Fifth: To the payment of any amount due and owing under the
Other Loans, pro rata, in the event of an acceleration of the
principal amount of such Other Loans; and
Sixth: To the payment of any surplus thereafter remaining to
the Shipowner or whomsoever may be lawfully entitled thereto.
The Shipowner has and shall have no personal liability or
obligation with respect to the amounts specified in paragraphs "FIRST" through
"FIFTH" above, which are payable solely from the income and proceeds received
by the Mortgagee from the Mortgagee's right, title and interest in and to the
Vessel.
Section 5.10 Mortgagee's Right to Remedy Defaults.
If the Shipowner shall default in the performance or observance of
any of the covenants in this Mortgage on its part to be performed or observed,
the Mortgagee may in its discretion do any act or make any expenditures
necessary to remedy such default, and the Shipowner shall promptly reimburse
the Mortgagee, with interest at the Default Rate from time to time in effect,
for any and all expenditures so made or incurred and until the Shipowner has
so reimbursed the Mortgagee for such expenditures, the amount thereof shall be
a debt due from the Shipowner to the Mortgagee and payment thereof shall be
secured by the lien of this Mortgage in like manner and extent as if the
amount and description thereof were written herein, but the Mortgagee,
although privileged to do so, shall be under no obligation to the Shipowner
to make any such expenditures and the making thereof shall not relieve the
Shipowner of any default in that or any other respect. The Shipowner also
shall reimburse the Mortgagee promptly with interest at the rates referred to
above for any and all advances and expenses made or incurred by the Mortgagee
at any time in taking the Vessel or otherwise protecting its rights hereunder
and for any and all damages sustained by the Mortgagee from or by reason of any
default or defaults of the Shipowner.
Section 5.11 Delegation of Powers.
The Mortgagee may delegate to any person or persons all or any of
the trusts, powers or discretions vested in it pursuant to this Mortgage and
any such delegations may be made upon such terms and conditions and subject to
such regulations (including power to subdelegate) as the Mortgagee may in its
absolute discretion deem appropriate.
Section 5.12 Legal Actions.
In addition to the other provisions hereof for enforcement of the
rights of the Mortgagee under this Mortgage, the Mortgagee may, at its option,
in the event of any default by the Shipowner, bring an action, suit or other
proceeding in rem against the Vessel to foreclose this Mortgage and sell the
Vessel in any court in the Republic of Liberia or any other country in which
the Vessel may be found; or an action, suit or other proceeding in personam
against the Shipowner or any other person obligated under the Loan Agreements
or any of the Security Documents to recover payment of any amount owing by the
Shipowner or such other person and/or to foreclose this Mortgage and sell the
Vessel in any country in which the Vessel or the Shipowner or any person so
obligated may be found.
Section 5.13 Mortgage Subject to Rights of Initial Charterer under
the Initial Charter.
So long as the Initial Charter is in effect, the rights of the
Mortgagee set forth in this Article V are and shall be subject to the rights
of the Initial Charterer under the Initial Charter. So long as the Initial
Charterer shall not be in default under and pursuant to the terms of the
Initial Charter, the Initial Charterer shall be entitled to quiet enjoyment of
the Vessel.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.01 Performance by Initial Charterer or Charterer Under
an Acceptable Replacement Charter.
(a) It is hereby agreed by the parties hereto that, for the
duration of the Initial Charter, when the Initial Charterer, or any charterer
under an Acceptable Replacement Charter, performs and discharges its
obligations under the Initial Charter respecting the Vessel, such performance
of the said obligations by the Initial Charterer shall be deemed to be proper
and due performance of the same obligations of the Shipowner under this
Mortgage, the Assignment of Earnings and other Security Documents,
notwithstanding that the extent or manner of performance of the Shipowner's
obligations may differ from that of the Initial Charterer under the Initial
Charter.
(b) So long as the Initial Charter is in effect, to the extent
the Shipowner's approval under the Initial Charter is not to be unreasonably
withheld, the approval by the Mortgagee under the corresponding provisions of
this Mortgage also shall not be unreasonably withheld.
(c) So long as the Initial Charter is in effect, where any
obligation with respect to the Vessel is undertaken by the Shipowner under
this Mortgage or any other of the Security Documents but such obligation is
not undertaken by the Initial Charterer under the Initial Charter, then the
Shipowner shall not be treated as in default under this Mortgage if such
obligation cannot be performed by virtue of the Initial Charter.
(d) So long as an Acceptable Replacement Charter is in effect,
the insurance coverage required under an Acceptable Replacement Charter or
maintained by the Shipowner or charterer in connection with any other charter
entered into after the termination of the related Initial Charter must be
sufficient to maintain the credit rating of the Term Mortgage Notes by the
Rating Agencies at least at the rating applicable to the Term Mortgage Notes
immediately prior to the effectiveness of such Acceptable Replacement Charter
or other charter.
Section 6.02 Discharge of Mortgage.
The Mortgagee agrees that upon payment of the Indebtedness it
shall at the expense of the Shipowner discharge this Mortgage and transfer or
release to the Shipowner all insurance policies and certificates of entry
relating to the Vessel freed and discharged from the provisions herein
contained.
Section 6.03 Indemnity.
The Shipowner assumes liability for and agrees to indemnify the
Mortgagee and the Holders and their respective directors, officers, employees
and agents from and against any and all liabilities, losses, damages,
penalties, costs and expenses, including legal expenses, of whatsoever kind or
nature, imposed on or asserted against any of the Mortgagee and the Holders
and such directors, officers, employees and agents in any way relating to or
arising out of the Vessel or the use thereof at any time by any party (other
than by the Mortgagee after such time as the Mortgagee shall have taken
possession of the Vessel pursuant to Section 5.02), including, without
limitation, (i) latent and other defects whether or not discovered or
discoverable by the Shipowner or any other person, (ii) claims for patent,
trademark or copyright infringement, (iii) tort or damage claims of any kind,
(iv) claims or penalties arising from any violation of the laws of any country
or political subdivision thereof and (v) claims for environmental liability or
in any way relating to applicable environmental laws.
Section 6.04 Governing Law.
THIS MORTGAGE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE REPUBLIC OF LIBERIA AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
Section 6.05 Severability.
If any provision of this Mortgage is held to be in conflict with
any applicable statute or rule of law or is otherwise held to be unenforceable
for any reason whatsoever, such circumstances shall not have the effect of
rendering the provision in question inoperative or unenforceable in any other
case or circumstance, or of rendering any other provision or provisions herein
contained invalid, inoperative, or unenforceable to any extent whatsoever.
The invalidity of any one or more phrases, sentences, clauses or
Sections of this Mortgage, shall not affect the remaining portions of this
Mortgage, or any part thereof.
Section 6.06 Notices.
All demands, notices and communications hereunder shall be in
writing, personally delivered or mailed by certified mail-return receipt
requested, and shall be deemed to have been duly given upon receipt (a) in the
case of the Mortgagee, at the following address: California Petroleum
Transport Corporation, c/o JH Management Corporation, Room 6/9, One
International Place, Boston, Massachusetts 02110-2624, (b) in the case of the
Shipowner, at the following address: Mareva House, 4 George Street, Nassau,
Bahamas, or at other such address as shall be designated by such party in a
written notice to the other parties.
Section 6.07 Headings.
The captions or headings in this Mortgage are for convenience only
and in no way define, limit or describe the scope or intent of any provisions
or Sections of this Mortgage.
Section 6.08 General Interpretive Principles.
For purposes of this Mortgage except as otherwise expressly
provided or unless the context otherwise requires:
(a) the defined terms in this Mortgage shall include the plural
as well as the singular, and the use of any gender herein shall be deemed to
include any other gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles as in effect on the date hereof;
(c) references herein to "Articles", "Sections", "Subsections",
"paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, paragraphs and other subdivisions
of this Mortgage;
(d) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to paragraphs and
other subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Mortgage as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
Section 6.09 Successors and Assigns.
This Mortgage shall inure to the benefit of and be binding upon
the Shipowner and the Mortgagee and their respective successors and assigns.
Section 6.10 Consent to Jurisdiction.
Any legal suit, action or proceeding against the Shipowner arising
out of or relating to this Mortgage, the Loan Agreements or any other Security
Document, or any transaction contemplated hereby or thereby, may be instituted
in any federal or state court in The City of New York, State of New York and
the Shipowner hereby waives any objection which it may now or hereafter have
to the laying of venue of any such suit, action or proceeding, and the
Shipowner hereby irrevocably submits to the jurisdiction of any such court in
any such suit, action or proceeding. The Shipowner hereby irrevocably appoints
and designates CT Corporation System, having an address at 1633 Broadway, New
York, New York, its true and lawful attorney-in-fact and duly authorized agent
for the limited purpose of accepting service of legal process and the
Shipowner agrees that service of process upon such party shall constitute
personal service of such process on the Shipowner. The Shipowner shall
maintain the designation and appointment of such authorized agent until all
amounts payable under this Mortgage, the Loan Agreements and the other
Security Documents shall have been paid in full. If such agent shall cease to
so act, the Shipowner shall immediately designate and appoint another such
agent satisfactory to the Mortgagee and shall promptly deliver to the
Mortgagee evidence in writing of such other agent's acceptance of such
appointment.
Section 6.11 Payment.
All monies payable by the Shipowner to the Mortgagee shall be paid
in Dollars without deduction for or on account of any present or future taxes
or imposts whatsoever levied or assessed by or within any state or nation or
any political subdivision or taxing authority thereof or therein and the
Shipowner shall indemnify the Mortgagee against all such taxes or imposts.
The Shipowner shall, subject to the prior written approval of the Mortgagee
(such approval not to be unreasonably withheld), be entitled to take action in
the name of the Mortgagee at the Shipowner's expense against any taxing
authority in respect of any withholding or other taxes for which the Shipowner
have indemnified the Mortgagee, and the Mortgagee agrees to reasonably
cooperate with the Shipowner in taking such action. If as a result of any
such action any moneys are received that are attributable to such indemnified
taxes (including any interest thereon paid by such taxing authority) the same
shall be recovered by the Shipowner.
Section 6.12 Recorded Amount.
For the purposes of the recording of this First Preferred Ship
Mortgage as required by Chapter 3 of Title 22 (Maritime Law) of the Liberian
Code of Laws of 1956, as amended, the total amount of this Mortgage is Two
Hundred and Eighty-Six Million Four Hundred Thousand United States Dollars
(US$286,400,000), and interest and the performance of the Mortgage covenants;
the maturity date is the ___ day of ________, 2014, and the discharge amount
is the same as the total amount. It is not intended that this Mortgage shall
include property other than the Vessel, and it shall not include property
other than the Vessel as the term "vessel" is used in Subsection (2) of
Section 106 of the Title 22 of the Liberian Code of Laws of 1956, as amended.
Notwithstanding the foregoing, for property other than the Vessel, if any
should be determined to be covered by this Mortgage, the discharge amount is
zero point zero one percent (0.01 %) of the total amount.
Section 6.13 No Waiver of Preferred Status.
No provision of this Mortgage shall be deemed to be a stipulation
that the Mortgagee waives the preferred status of this Mortgage given by Title
22 (Maritime Law) of the Liberian Code of Laws of 1956, as amended. Any
provision of this Mortgage which would otherwise constitute such a
stipulation, to such extent, shall have no force or effect.
IN WITNESS WHEREOF the Shipowner has signed this Mortgage on the
day and year first before written.
CALPETRO TANKERS (BAHAMAS III)
LIMITED
By: ______________________
Name:_____________________
Title:____________________
ACKNOWLEDGEMENT
STATE OF NEW YORK )
:ss. :
COUNTY OF NEW YORK )
On this day of _________ __ 1994_, before me personally came
_________________ to me known, and known to me to be the person who
executed the foregoing instrument, who being by me duly sworn, did depose
and say that he resides at
_______________________________________________________ that he is the
attorney-in-fact for CalPetro Tankers (Bahamas III) Limited, the
corporation described in, and which executed, the foregoing instrument;
that it was so affixed by order of the Board of Directors of said
corporation and that he signed his name thereto by like order.
___________________________________
EXHIBIT A
BROKER'S LETTER OF UNDERTAKING
(date)
__________________________
Re: CalPetro Tankers (Bahamas III) Limited
Owner of m.t. William E. Crain (the "Vessel")
We confirm that we have effected insurances for the account of the
above Owner as set out in Appendix "A" attached hereto.
Pursuant to instructions received from CalPetro Tankers (Bahamas
III) Limited (the "Owner"), and in consideration of your approving our
appointment as Brokers in connection with the insurances covered by this
letter, we hereby undertake:
1. to hold the Insurance Slips or Contracts, the Policies when
issued, and any renewals of such Policies or new Policies or
any Policies substituted (with your consent) therefor and
the benefit of the insurance thereunder to your order in
accordance with the terms of the Notice of Assignment and
Loss Payable Clause set out in Appendix "B" attached hereto;
and
2. to have endorsed on each and every Policy as and when the
same is issued a copy of the Notice of Assignment and Loss
Payable Clause in the form of Appendix "B" attached hereto
dated and signed by the Shipowner and acknowledged by
Underwriters in accordance with market practice; and
3. to advise you immediately of any material changes which may
be made to the terms of the insurances or if we cease to be
Brokers for purposes of said insurances; and
4. to advise you, not later than one month before expiry of
said insurances, in the event of our not having received
notice of renewal instructions from the Shipowner and/or its
agents, and in the event of our receiving instructions to
renew said insurances to advise you promptly of the details
thereof.
Our above undertakings are given subject to our lien on the
Policies for premiums for the Vessel and subject to our right of cancellation
on default in payment of such premiums. We undertake to advise you immediately
if any premiums are not paid to us by the applicable due date and not to
exercise such rights of cancellation without giving you (i) fourteen (14) days'
prior notice in writing, either by letter to the above address or by telex or
cable to ________________________, respectively, and (ii) a reasonable
opportunity of paying any premiums outstanding except it is understood that in
the case of War Risks the terms of the Automatic Termination of Cover Clause
contained in the War Risks Policies shall override any undertakings given by us
as Brokers. We further undertake and agree that in the event of a total loss
of the Vessel, or an arranged, compromised or constructive total loss, our
lien on the Policies and the proceeds thereof shall be limited to any other
premiums or other amounts due in respect of the Vessel or interest insured
under the Policies.
Notwithstanding the terms of the said Loss Payable clause and the
said Notice of Assignment, unless and until we receive notice from you to the
contrary, we shall be empowered to arrange for a collision and/or salvage
guaranty to be given in the event of bail being required in order to prevent
the arrest of the Vessel or to secure the release of the Vessel from arrest
following a casualty. We undertake to advise you immediately in the event of
our having arranged for a collision and/or salvage guaranty. Where a guaranty
has been given as aforesaid and the guarantor has paid an amount under the
guaranty in respect of such claim, there shall be payable directly to the
guarantor out of the proceeds of the said Policies an amount equal to the
amount so paid.
Finally, it is understood that all claims shall be collected
through us, as Brokers, and that in collecting such claims we are acting on
your behalf as assignee of the insurances covered by this letter.
Yours faithfully,
[insert name of Broker]
By: _____________________________
Director
SCHEDULE 1
Defined Terms Used in the Mortgage
"Acceptable Replacement Charter" means any replacement charter
which satisfies each of the following requirements: (i) the charter is a
bareboat charter and requires that the charterer thereunder "gross up"
charterhire payments to indemnify and hold the Holders of the Securities
harmless from any withholding tax imposed on the charterhire payments or on the
payments on the Securities; (ii) the charterhire payments payable during the
non-cancelable term of such replacement charter, after giving effect to (1)
any "gross up" of such amounts as a result of any withholding tax on such
charterhire payments, (2) the receipt of the Termination Payment and (3) all
fees and expenses incurred in connection with the rechartering of the Vessel,
provide sufficient funds for the payment in full when due of (A) the Allocated
Principal Amount of the Term Mortgage Notes for the related Vessel and
interest thereon in accordance with the revised schedule of sinking fund and
principal payments, that is applicable upon termination of the related Initial
Charter, (B) the amount of Recurring Fees and Taxes for such Vessel, (C) the
amount of Management Fees and Technical Advisor's Fees for such Vessel, (D)
the amount of fees and expenses of the Indenture Trustee and Collateral
Trustee allocable to such Vessel and (E) an amount at least equal to 30% of
the estimated amounts, on a per annum basis, referred to in clauses (B), (C)
and (D) above for miscellaneous or unexpected expenses; and (iii) the Rating
Agencies shall have confirmed in writing to the Trustee that the terms and
conditions of such proposed charter will not result in the withdrawal or
reduction of the then current ratings of the Term Mortgage Notes.
"Allowable Investments" means for the Shipowner, its investment in
the Vessel and any Restricted Payment permitted to be made by the Shipowner
and certain obligations incurred in the ordinary course of the performance of
the Management Agreement.
"Assignment of Charter" means the assignment between the Shipowner
and the Mortgagee, as amended from time to time in accordance with the terms
thereof, together with the documents contemplated thereby, pursuant to which
the Shipowner assigns to the Mortgagee all of its right, title and interest
in, to and under the Initial Charter.
"Assignment of Earnings and Insurances" means the assignment
between the Shipowner and the Mortgagee, as amended from time to time in
accordance with the terms thereof, pursuant to which the Shipowner assigns to
the Mortgagee all of its right, title and interest in, to and under the
freights and hires (as well as any charters entered into after the Closing
Date) with respect to the Vessel.
"Assignment of Guarantee" means the assignment between the
Shipowner and the Mortgagee, as amended from time to time in accordance with
the terms thereof, pursuant to which the Shipowner assigns to the Mortgagee
all of its right, title and interest in, to and under the Chevron Guarantee.
"Business Day" means any day other than a Saturday, a Sunday or a
day on which banking institutions in New York, New York, or in the city and
state where the Trustee's principal offices are located, are authorized or are
obligated by law, executive order or governmental decree to be closed.
"Charter" means with respect to each Vessel, the Bareboat Charter,
dated as of ________________, between the Charterer and the Shipowner.
"Charterer" means Chevron Transport Corporation.
"Classification society" means a private organization which has as
its purpose the supervision of vessels during their construction and
afterward, in respect to their seaworthiness and upkeep, and the placing of
vessels in grades or "classes" according to the society's rules for each
particular type of vessel.
"Closing Date" means ______, 1994.
"Code" means the United States Internal Revenue Code of 1986 and
the corresponding provisions of any successor statute.
"Collateral Trustee" means Chemical Trust Company of California.
"Compulsory Acquisition " means requisition for title or other
compulsory acquisition of the Vessel (otherwise than by requisition for hire),
capture, seizure, detention or confiscation of the Vessel by any other
government or by Persons acting or purporting to act on behalf of any
government or governmental authority.
"Default Period " means the period commencing the date any payment
hereunder was due to but not including the date such payment is paid in full.
"Default Rate " means a rate per annum for each day during the
Default Period until such payment shall be paid in full equal to 1.50% above
LIBOR at the commencement of such period.
"Dollar" or "$" means the lawful currency of the United States of
America.
"Earnings" includes all monies whatsoever due or to become due to
the Shipowner at any time arising out of the use or operation of the Vessel or
otherwise including (but without prejudice to the generality of the foregoing)
all sums due and payable to the Shipowner under and pursuant to the Initial
Charter and all freight, hire and passage monies and compensation payable to
the Shipowner in the event of requisition of the Vessel for hire, remuneration
for salvage and towage, services, demurrage and detention moneys and any other
damages for breach (or payments for variation or termination) of any
charterparty or any contract of employment of the Vessel and all earnings of
the Vessel due or to become due to the Shipowner.
"Event of Default" means an Event of Default under Section of
the Loan Agreement.
"Governmental Approval " means any authorization, consent,
approval, license, franchise, lease, ruling, permit, tariff, rate,
certification, exemption, filing or registration by or with any Governmental
Authority relating to the ownership of the Collateral or to the execution,
delivery or performance of the Loan Agreement or any Security Document.
"Governmental Authority" means the federal government, any state
or other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any other governmental entity with authority over the
Shipowner or operation of the Vessels.
"Indebtedness" means the payment, performance or other obligations
of any kind whatsoever of the Shipowner under and pursuant to the Loan
Agreements and the Security Documents, together with interest thereon, and all
other sums which may be or become due to the Mortgagee under or pursuant to
the terms thereof and hereof.
"Insurance" means any policies and contracts of insurance and
entries in any protection and indemnity or war risks association which are
effected by or on behalf of the Shipowner in respect of the Vessel or
otherwise in connection with the Vessel, including but not limited to any
insurance monies received by the Shipowner pursuant to clauses 12 and 13 of
the Initial Charter and including all claims and returns of premiums
thereunder and including any compensation payable by whomsoever to the
Shipowner by virtue of requisition of the Vessel for title or confiscation
or seizure of the Vessel by any government or person or agency purporting
to act on behalf of any government.
"Issue of One Debenture" means each Issue of One Debenture between
the Shipowner and the Mortgagee, as amended from time to time in accordance
with the terms thereof, pursuant to which the Shipowner grants to the
Mortgagee a security interest in all of its assets.
"Law" means any statute, law, rule, regulation, ordinance, order,
code, policy or rule of common law, now or hereafter in effect, and any
judicial or administrative interpretation thereof by a Governmental Authority
or otherwise, including any judicial or administrative order, consent decree
or judgment.
"Lien" means any mortgage, lien (statutory or other), pledge,
security interest, encumbrance, claim, hypothecation, assignment for security,
deposit arrangement or preference or other security agreement of any kind or
nature whatsoever. For purposes of the Loan Agreement, a Person shall be
deemed to own subject to a Lien any property which it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement.
"Loan Agreements" means, collectively, the Serial Loan Agreement
and the Term Loan Agreement.
"Management Agreement" means the management agreement between the
Shipowner, the Manager and Barber Ship Management Group.
"Manager" means the Person performing the duties of the Manager
under the Management Agreement, initially P.D. Gram & Co. ans.
"Net Income" means the net income (loss) of the Shipowner for a
period, determined on a consolidated basis, in accordance with generally
accepted accounting principles, together with any related provision for taxes.
"Obligations" means, collectively, the Serial Obligations and the
Term Obligations.
"Other Loan Agreements" means, collectively, the six loan
agreements, two each between the Mortgagee and each of the Other Owners
relating to the Other Loans.
"Other Loans" means each of the loans from California Petroleum
Transport Corporation to each of the Other Owners made on the Closing Date,
having an aggregate initial principal amount of $____________.
"Other Owners" means Calpetro Tankers (Bahamas I) Limited,
Calpetro Tankers (Bahamas II) Limited and Calpetro Tankers (IOM) Limited.
"Payment Date" means each _____ and ______ commencing ________,
1994.
"Permitted Liens" means the Charter, liens for crew's wages
accrued for not more than three months or for collision or salvage, liens in
favor of suppliers of necessaries or other similar liens arising in the
ordinary course of its business (accrued for not more than three months) or
liens for loss, damage or expense, which are fully covered by insurance or, in
respect of which, a bond or other security has been posted by the Shipowner
with the appropriate court or other tribunal to prevent the arrest or secure
the release of the Vessel from arrest on account of such claim or lien;
provided, however, that so long as the Charter is in effect "Permitted Liens"
shall mean those liens, claims and encumbrances permitted under the Charter.
"Person" means an individual, a partnership, a corporation, a
joint venture, an unincorporated association, a joint-stock company, a trust,
or other entity or a government or any agency or political subdivision thereof.
"Proceeding" means any suit in equity, action at law, or other
judicial or administrative proceeding.
"Purchase Agreement" means the Purchase Agreement, dated as of
___________ between the Shipowner and the Initial Charterer wherein the
Shipowner purchases the Vessel from the Initial Charterer.
"Rating Agencies" means Moody's Investors Service, Inc., Standard
& Poor's Rating Group and Duff & Phelps Credit Rating Co.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and bylaws or partnership agreement or other organizational or
governing documents of such Person, and, any Law applicable to or binding upon
such Person or any of its properties or to which such Person or any of its
properties is subject.
"Security Documents" means the Loan Agreements, the Other Loan
Agreements, the Mortgage, the Assignment of Charter, the Assignment of
Earnings and Insurances, the Assignment of Guarantee, the Stock Pledge
Agreement, the Assignment of Management Agreement, the Assignment of Purchase
Agreement and the Issue of One Debenture, collectively.
"Serial Loan" means the loan in the initial principal amount of $
made by the Mortgagee to the Shipowner under the Serial Loan Agreement.
"Serial Loan Agreement" means the Loan Agreement, dated as of
_________ 1, 1994, between the Shipowner and the Mortgagee.
"Serial Obligations" means the payment, performance or obligations
of any kind or nature whatsoever by the Shipowner under and pursuant to the
Serial Loan Agreements, any Security Document and any instrument, agreement or
document referred to therein.
"State" means any state of the United States of America and, in
addition, the District of Columbia.
"Stock Pledge Agreement" means the Stock Pledge Agreement, dated
as of ___________, 1, 1994, between the Mortgagee and California Tankers
Investments Limited.
"Term Loan" means the loan in the initial principal amount of $
made by the Mortgagee to the Shipowner under the Term Loan Agreement.
"Term Loan Agreement" means the Loan Agreement, dated as of
_________ 1, 1994, between the Shipowner and the Mortgagee.
"Term Obligations" means the payment, performance or obligations
of any kind or nature whatsoever of the Shipowner under and pursuant to the
Term Loan Agreements, any Security Document and any instrument, agreement or
document referred to therein.
"Total Loss" means either (a) actual or constructive or
compromised or arranged total loss of the Vessel, (b) Compulsory Acquisition
of the Vessel or (c) if so declared by the Initial Charterer at any time and
in its sole discretion a requisition for hire of the Vessel for a period in
excess of 180 days.
ASSIGNMENT OF A FIRST PREFERRED SHIP MORTGAGE
THIS ASSIGNMENT OF THE FIRST PREFERRED SHIP MORTGAGE ("this Assignment")
is made the ___ day of _____________, 1994 by California Petroleum Transport
Corporation, a corporation organized under the laws of the State of Delaware
(herein called the "Assignor"), in favor of Chemical Trust Company of
California, a corporation organized under the laws of the State of California
(herein called the "Assignee").
W I T N E S S E T H T H A T:
WHEREAS:
(A) CalPetro Tankers (Bahamas III) Limited (herein called the
"Owner"), a corporation incorporated under the laws of the Commonwealth of The
Bahamas with its registered office at Mareva House, 4 George Street, Nassau,
Bahamas, has granted and executed a certain First Preferred Ship Mortgage
dated ____ __, 1994 (the "Mortgage") in favor of the Assignor in the amount
of U.S. $286,400,000 and interest and performance of mortgage covenants (the
"Outstanding Indebtedness") on the vessel m.t. William E. Crain, documented
under the laws of the Republic of Liberia, Official No. _______ (the
"Vessel"), the Mortgage having been recorded on _____________, 199__ at E.D.T.
in the Office of the Deputy Commissioner of Maritime Affairs of the Republic
of Liberia at New York, New York, in Book PM ____ at Page _____ to secure the
payment by the Owner to the Assignor of the Outstanding Indebtedness;
(B) The Assignor has agreed to execute and deliver to the Assignee
this Assignment, as security for the prompt and due payment to the Assignee of
certain securities issued by the Assignor, pursuant to two indentures attached
hereto as Exhibits A and B (the "Serial Indenture" and the "Term Indenture",
and collectively, the "Indentures"). Pursuant to the Serial Indenture dated
as of ____ 1, 1994, between the Assignor and the Assignee, the Assignor issued
the Serial First Preferred Mortgage Notes (the "Serial Notes") in the initial
amount of $168,500,000 and pursuant to the Term Indenture dated as of ____ 1,
1994, between the Assignor and the Assignee, the Assignor issued the Term
First Preferred Mortgage Notes in the initial amount of $117,900,000 (the
Serial Notes and the Term Notes, collectively, the "Securities"). This
Assignment is security for the due and prompt payment of the Securities and
any and all other sums which may be or become due to the Assignee and/or the
holders of the Securities under or pursuant to the Serial Indenture and the
Term Indenture, equally and ratably, and this Assignment and also to secure
the exact performance and observance and compliance with all and any of the
covenants and agreements and terms and conditions contained in the Serial
Indenture and the Term Indenture, equally and ratably, and this Assignment and
the other Security Documents (collectively, the "Indebtedness").
NOW, THEREFORE, in consideration of the premises and such other
consideration, the receipt and sufficiency of which is hereby acknowledged by
the Assignor:
1. Capitalized terms used in this Assignment and not otherwise
defined herein shall have the meanings assigned to such terms in
the Indentures, attached as Exhibits A and B hereto, and the
definitions of such terms shall be equally applicable to both the
singular and the plural forms of such terms.
2. The Assignor does hereby sell, assign, transfer and set over unto
the Assignee for the benefit of the assignee and its successors
and assigns, in consequence of the Assignment, all of the
assignor's right, title and interest in, to and under the Mortgage
and all of the assignor's right, title and interest in and to the
Vessel together with all of the boilers, engines, machinery,
masts, rigging, boats, anchors, chains, tackle, apparel,
furniture, fittings and equipment and all other appurtenances
thereto appertaining or belonging to the exclusive use of the
Vessel, whether now owned or hereafter acquired, whether on board
or not, all additions, improvements and replacements hereafter
made in or to the Vessel.
IN WITNESS WHEREOF, the Assignor has caused this Assignment to be
executed on the day and year first above written.
CALIFORNIA PETROLEUM
TRANSPORT CORPORATION
By: _______________
Name: _______________
Title:_______________
State of New York )
: ss.:
County of New York )
On the (date) day of (month), 1994, before me personally came
(attorney), to me known, who being by me duly sworn did depose and say that
he resides at (address); that he is an attorney-in-fact of California
Petroleum Transport Corporation, the corporation described in and which
executed the foregoing Assignment of Mortgage; and that he signed his name
thereto by order of the Board of Directors of said corporation.
__________________________
Notary Public
DEED OF COVENANTS
TO ACCOMPANY FIRST PRIORITY
STATUTORY MORTGAGE OF A SHIP
by
CALPETRO TANKERS (BAHAMAS I) LIMITED
Shipowner
to
CALIFORNIA PETROLEUM TRANSPORT CORPORATION
Mortgagee
Dated _________ __, 1994
m/t ____________
TABLE OF CONTENTS
Page No.
ARTICLE I
DEFINITIONS
Section 1.01 Definitions................................................ 1
ARTICLE II
MORTGAGE
Section 2.01 Grant of Mortgage.......................................... 2
Section 2.02 Indebtedness............................................... 3
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations and Warranties of the Shipowner............ 4
ARTICLE IV
COVENANTS
Section 4.01 Payment of Indebtedness.................................... 6
Section 4.02 Corporate Existence........................................ 6
Section 4.03 Insurance.................................................. 6
Section 4.04 Defense of Title........................................... 13
Section 4.05 Discharge of Liens......................................... 13
Section 4.06. Liens...................................................... 14
Section 4.07 Use of Vessel.............................................. 14
Section 4.08 Notifications.............................................. 15
Section 4.09 Payment of Crew's Wages and Allotments..................... 16
Section 4.10 Charter of Vessel.......................................... 16
Section 4.11 Maintenance of Vessel...................................... 16
Section 4.12 Statement of Classification Society........................ 17
Section 4.13 Surveys of Vessel.......................................... 17
Section 4.14 Access to Vessel........................................... 17
Section 4.15 Books and Records.......................................... 17
Section 4.16 Registration of Statutory Mortgage; Recordation of
Statutory Mortgage......................................... 18
Section 4.17 Notice of Mortgage......................................... 18
Section 4.18 Further Assurances......................................... 19
Section 4.19. Withholding Tax............................................ 19
Section 4.20. Expenses................................................... 19
Section 4.21. Indebtedness............................................... 20
Section 4.22. Business of Shipowner...................................... 20
Section 4.23. No Bankruptcy Petition..................................... 20
Section 4.24. Consolidation, Merger and Sale of Assets................... 20
Section 4.25. Loans, Advances and Other Liabilities...................... 20
Section 4.26. Restricted Payment......................................... 20
ARTICLE V
EVENTS OF DEFAULT; REMEDIES
Section 5.01 Events of Default.......................................... 21
Section 5.02 Remedies................................................... 22
Section 5.03 Sale of the Vessel......................................... 24
Section 5.04 Mortgagee as Attorney-in Fact.............................. 25
Section 5.05 Appointment of Receiver.................................... 25
Section 5.06 Arrest or Detention of Vessel.............................. 26
Section 5.07 Defense of Suits........................................... 26
Section 5.08 Cumulative Rights, Powers and Remedies..................... 26
Section 5.09 Application of Proceeds.................................... 27
Section 5.10 Mortgagee's Right to Remedy Defaults....................... 28
Section 5.11 Delegation of Powers....................................... 28
Section 5.12 Legal Actions.............................................. 29
Section 5.13 Deed and Statutory Mortgage Subject to Rights of Charterer
under the Charter.......................................... 29
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.01 Performance by Charter..................................... 29
Section 6.02 Discharge of Mortgage...................................... 30
Section 6.03 Indemnity.................................................. 30
Section 6.04 Governing Law.............................................. 30
Section 6.05 Severability............................................... 31
Section 6.06 Notices.................................................... 31
Section 6.07 Headings................................................... 31
Section 6.08 General Interpretive Principles............................ 31
Section 6.09 Successors and Assigns..................................... 32
Section 6.10 Consent to Jurisdiction.................................... 32
Section 6.11 Payment.................................................... 32
Section 6.12 Recorded Amount............................................ 33
Section 6.13 No waiver of Preferred Status.............................. 33
Deed of Covenants, dated _________ __, 1994 (as amended or
supplemented from time to time, the "Deed"), from CalPetro Tankers (Bahamas I)
Limited, a company incorporated with limited liability in the Bahamas whose
registered office is at Mareva House, 4 George Street, Nassau, Bahamas
(hereinafter called "the Shipowner") to California Petroleum Transport
Corporation (the "Mortgagee").
WHEREAS, the Shipowner is the absolute and unencumbered owner of
the whole of the motor tanker "Condoleezza Rice" (the "Vessel") duly
registered in the name of the Shipowner under the laws and flag of The
Commonwealth of the Bahamas on ___________ __, 199_, built in 199_, having the
following approximate dimensions and tonnages: length ___ meters, breadth
____ meters, depth __ meters, gross tonnage _______, net tonnage ________, and
more particularly described in the Certificate of Registration with Official
Number _____ and with International Code Signal ______ and home port of
Nassau, Bahamas;
WHEREAS, contemporaneously with the execution of this Deed there
has been executed and registered by the Shipowner in favor of the Mortgagee a
First Priority Statutory Bahamian Mortgage (to secure an account current) (the
"Statutory Mortgage") constituting a first priority statutory mortgage of the
whole of the Vessel and the Shipowner has agreed to execute this Deed
collateral thereto and to the security thereby created;
WHEREAS, in order to secure the prompt and due payment to the
Mortgagee of the Indebtedness (as defined herein) and any and all other sums
which may be or become due to the Mortgagee under or pursuant to the Loan
Agreements, this Deed, the Statutory Mortgage and any other Security Document
and also to secure the exact performance and observance and compliance with
all and any of the covenants and agreements and terms and conditions contained
in the Loan Agreements, this Deed, the Statutory Mortgage and in the other
Security Documents, the Shipowner has duly authorized the execution and
delivery of this Deed and the Statutory Mortgage in favor of the Mortgagee
under and pursuant to the laws of the Commonwealth of the Bahamas.
NOW, THEREFORE, in consideration of the premises and of the
covenants herein contained, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
Capitalized terms used in this Deed and the Statutory Mortgage and
not otherwise defined herein shall have the meanings assigned to such terms in
either Schedule 1 to this Deed or the Loan Agreements, and the definitions of
such terms shall be equally applicable to both the singular and the plural
forms of such terms.
ARTICLE II
MORTGAGE
Section 2.01 Grant of Mortgage.
In consideration of the premises and of other good and valuable
consideration, the adequacy and receipt whereof are hereby acknowledged, and
in order to secure the payment of the Indebtedness and the repayment of any
costs of foreclosure or of retaking the Vessel, and the payment of all such
other amounts as may hereafter become secured by this Deed and Statutory
Mortgage in accordance with the terms hereof and thereof, and to secure the
performance and observance of and compliance with the covenants, terms and
conditions contained in this Deed, the Statutory Mortgage, the Loan
Agreements, and the other Security Documents to which the Shipowner is a
party, the Shipowner has granted, conveyed, pledged and mortgaged and does by
these presents grant, convey, pledge and mortgage to and in favor of the
Mortgagee, its successors and assigns the whole of the Vessel, together with
all of the boilers, engines, machinery, masts, spars, rigging, boats, cables,
anchors, chains, tackle, apparel, furniture, fittings, freights and equipment
thereunto appertaining or belonging, whether now owned or hereafter acquired,
whether on board or not, and all additions, improvements and replacements
hereafter made in or to the Vessel (the term "Vessel", as used herein, shall
include the Vessel together with all of the foregoing and the Vessel's
freights) To Have And To Hold the same unto the Mortgagee, its successors and
assigns, forever upon the terms set forth in this Deed and the Statutory
Mortgage for the enforcement of the payment of the Indebtedness, the payment
of any costs of foreclosure or retaking of the Vessel and all such other
amounts as may hereafter become secured by this Deed and the Statutory
Mortgage in accordance with the terms hereof and thereof and to secure the
performance and observance of and compliance with the covenants, terms and
conditions contained in this Deed, the Statutory Mortgage and the Security
Documents, it being agreed that if any amount payable by the Shipowner under
either Loan Agreement is not paid on its due date (whether formally demanded
or not) the whole or the balance of the Indebtedness and all other amounts
payable under the Security Documents shall forthwith on demand become payable;
provided, however, and the conditions of these presents are such that, if the
Shipowner shall pay or cause to be paid to the Mortgagee all of the
Indebtedness as set forth in the Security Documents, and if the Shipowner
shall pay all such other amounts as may hereafter become secured by this
Mortgage and all expenses which the Mortgagee shall have paid or incurred to
protect the security granted hereunder, and if the Shipowner shall perform,
observe and comply with all and singular of the covenants, terms and
conditions in this Deed, the Statutory Mortgage, the Loan Agreements and the
other Security Documents contained, expressed or implied, to be performed,
observed or complied with by and on the part of the Shipowner or its
successors or assigns, all without delay or fraud and according to the true
intent and meaning hereof and therefor, then these presents and the rights of
the Mortgagee under this Mortgage and the other Security Documents shall cease
and, in such event, the Mortgagee agrees by accepting this Deed and the
Statutory Mortgage to execute, at the expense of the Shipowner, all such
documents as the Shipowner may reasonably require to discharge this Deed and
the Statutory Mortgage under the laws of the Commonwealth of the Bahamas;
otherwise this Deed and the Statutory Mortgage shall remain in full force and
effect; provided further, however, the conditions of these presents are such
that, if the Shipowner shall satisfy or cause to be satisfied and pay or cause
to be paid to the Mortgagee all of the Serial Obligations, then these presents
and the rights of the Mortgagee under this Deed and the Statutory Mortgage and
the other Security Documents with respect to the Serial Loan Agreement shall
cease and, in such event, this Deed and the Statutory Mortgage shall secure
all of the Indebtedness other than the Serial Obligations.
Section 2.02 Indebtedness.
(a) The Shipowner acknowledges that pursuant to the Loan
Agreements it is jointly and severally liable with the Other Owners to the
Mortgagee in the original principal amount of Two Hundred Eighty-Six Million
Four Hundred Thousand United States Dollars (US$286,400,000). The Shipowner
shall repay the Obligations in accordance with terms and conditions of the
Loan Agreements with the last installment due and payable on _________, 2014.
The Shipowner further agrees to pay all other sums comprising the Indebtedness
in accordance with the terms, conditions and provisions in the Loan Agreements
and in this Deed and the Statutory Mortgage and to perform, observe and comply
with the covenants, terms and obligations and conditions on its part to be
performed, observed and complied with contained or implied herein and in the
Loan Agreements and in the other Security Documents.
(b) The Shipowner shall also pay to the Mortgagee upon the
Mortgagee's first written demand all stamp duties, registration and/or
recording fees, charges for certificates, valuation fees, costs and expenses
(including, the fees and expenses of its attorneys) of any nature whatsoever
incurred by the Mortgagee in connection with the preparation, completion,
execution and registration of this Deed and the Statutory Mortgage and all
other claims, expenses, costs, payments, disbursements, losses, damages or
liabilities which may be incurred by the Mortgagee by reason of the covenants
and conditions contained herein, in the Loan Agreements or in the other
Security Documents, together with interest thereon as herein or therein
provided, and confirms that such obligations are secured by this Deed and the
Statutory Mortgage.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations and Warranties of the Shipowner.
The Shipowner hereby represents and warrants to the Mortgagee as
follows:
(a) The Shipowner (i) is a company duly formed, validly existing
and in good standing under the laws of The Bahamas and (ii) is duly
authorized, to the extent necessary, to do business in each jurisdiction where
the character of its properties or the nature of its activities makes such
qualification necessary. The Shipowner has not engaged in any business or
activity other than as set forth in Section 5.04 of the Loan Agreements. The
Shipowner has all requisite corporate power and authority to own and operate
the property it purports to own and to carry on its business as now being
conducted and as proposed to be conducted in respect of the Vessel.
(b) The Shipowner has all necessary corporate power and authority
to execute, deliver and perform under this Deed and the Statutory Mortgage,
the Loan Agreements and each other Security Document to which it is a party.
(c) All action on the part of the Shipowner that is required for
the authorization, execution, delivery and performance of this Deed and the
Statutory Mortgage, the Loan Agreements and each other Security Document to
which it is a party, in each case has been duly and effectively taken; and the
execution, delivery and performance of this Deed, the Statutory Mortgage, the
Loan Agreements and each such other Security Document do not require the
approval or consent of any Person except for such consents and approvals as
have been obtained on or prior to the date hereof.
(d) This Deed, the Statutory Mortgage, the Loan Agreements and
each other Security Document to which the Shipowner is a party have been duly
executed and delivered by the Shipowner. Each of this Deed, the Statutory
Mortgage, the Loan Agreements and each other Security Document to which the
Shipowner is a party constitute a legal, valid and binding obligation of the
Shipowner, enforceable against it in accordance with the terms thereof, except
as such enforceability (i) may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting the
enforcement of creditors' rights and remedies generally and (ii) is subject to
general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).
(e) Neither the execution, delivery and performance of this Deed,
the Statutory Mortgage, the Loan Agreements or any other Security Document to
which the Shipowner is a party nor the consummation of any of the transactions
contemplated hereby or thereby nor performance of or compliance with the terms
and conditions hereof or thereof (i) contravenes any Requirement of Law
applicable to the Shipowner or to the Vessel, (ii) constitutes a default under
any Security Document or (iii) results in the creation or imposition of any
Liens on the Vessel (other than Permitted Liens) or results in the
acceleration of any obligation.
(f) The Shipowner is in compliance with and not in default under
any and all Requirements of Law applicable to the Shipowner and all terms and
provisions of this Deed, the Statutory Mortgage, the Loan Agreements and all
Security Documents.
(g) All Governmental Approvals which are required to be obtained
in the name of the Shipowner in connection with the operation and maintenance
of the Vessel and the execution, delivery and performance by the Shipowner of
this Deed and the Statutory Mortgage have been obtained and are in effect as
of the date hereof.
(h) There are no actions, suits or proceedings at law or in
equity or by or before any Governmental Authority now pending against the
Shipowner or the Vessel or, to the best of the Shipowner's knowledge,
threatened against the Shipowner or the Vessel or pending or threatened
against any property or other assets or rights of the Shipowner with respect
to the Vessel, this Deed, the Statutory Mortgage or any other Security
Document.
(i) The Shipowner is the sole and lawful owner of the whole of
the Vessel, free from all liens, security interests, mortgages, charges or
encumbrances (other than this Deed, the Statutory Mortgage and Permitted
Liens). The Shipowner shall defend for the benefit of the Mortgagee the title
and possession of the mortgaged property and every part thereof against the
claims and demands of all Persons.
(j) The Shipowner is, by this Deed and the Statutory Mortgage and
the recordation thereof, constituting in favor of the Mortgagee, among other
things, all the rights of a First Priority Statutory Mortgage of the Vessel to
secure the due and punctual payment of all amounts due and to become due to
the Mortgagee pursuant to the terms and conditions of this Deed, the Statutory
Mortgage, the Loan Agreements, the other Security Documents and the documents
contemplated hereby and thereby and the payment of all commissions and fees,
costs, charges, expenses, expenditures and interest owing to the Mortgagee
hereunder and thereunder, and the performance and observance of and compliance
with all the covenants, terms, conditions and provisions of this Deed, the
Statutory Mortgage, the Loan Agreements, the other Security Documents and the
documents contemplated hereby and thereby.
(k) No tax deficiencies and no past due obligations exist that
materially affect the operations of the Shipowner, except those contested in
good faith by appropriate proceedings for which adequate reserves with respect
to such claims so contested have been set aside on the books of the Shipowner.
(l) The Shipowner is not liable for any material amount of sales,
use or other similar tax in connection with the transactions described in this
Deed, the Statutory Mortgage, the Loan Agreements and the other Security
Documents.
ARTICLE IV
COVENANTS
So long as any of the Indebtedness is outstanding or any of its
obligations hereunder or under either Loan Agreement remain outstanding, the
Shipowner covenants and agrees, subject to Section 6.01, with the Mortgagee as
follows:
Section 4.01 Payment of Indebtedness.
The Shipowner shall repay to the Mortgagee the Indebtedness and at
all times shall keep, perform and observe the covenants, conditions and
agreements in this Deed, the Statutory Mortgage and the other Security
Documents contained, expressed or implied on its part to be kept performed and
observed for so long as any part of the Indebtedness remains outstanding.
Section 4.02 Corporate Existence.
The Shipowner is and shall remain a corporation qualified under
the laws of the Bahamas.
Section 4.03 Insurance.
(a) The Shipowner, at its expense (including payment of all
premiums, costs and club calls, if any) shall effect or cause to be effected
the following insurances and keep the following in full force and effect:
(i) hull and machinery insurance equal to the greater of (i) the
Vessel's full commercial value and (ii) one hundred and fifteen percent
(115%) of the aggregate outstanding principal balance of the Term Loan
and the Serial Loan. Such Hull and Machinery insurance shall include
the "Institute Pollution Hazard Clause" and the "Institute Liner
Negligence and Additional Perils Clause". If the Vessel is laid up in
port for an extended period, then, with the prior written consent of the
Mortgagee, the Shipowner may obtain in lieu of the hull and machinery
insurance referred to in this Section 4.03(a)(i) port risk insurance
equal to the greater of (A) the Vessel's full commercial value or (B)
one hundred and fifteen per cent (115%) of the aggregate outstanding
principal balance of the Term Loan and Serial Loan. Such Port Risk
insurance shall be effected on Institute of London Underwriters
"Institute Port Risk Clauses" or American Institute "Port Risk
Endorsement";
(ii) war risk hull and machinery insurance (including risks of
mines) equal to the greater of (A) the Vessel's full commercial value or
(B) one hundred and fifteen percent (115%) of the aggregate outstanding
principal balance of the Term Loan and Serial Loan. Such war risk
insurance shall be effected with a War Risks Association approved by the
Mortgagee or on the full Institute of London Underwriters "Institute War
and Strikes Clauses" or American Institute "Hull War Risks and Strikes
Clauses";
(iii) mortgagee additional perils (oil pollution) insurance in an
amount equal to the aggregate outstanding principal amount of the Term
Loan and the Serial Loan related to the Vessel;
(iv) confiscation and requisition insurance to the extent and in
the circumstances that a prudent shipowner would obtain and maintain
such insurances;
(v) protection and indemnity insurance in the name of the
Shipowner, which shall include freight, demurrage and defense coverage
in an unlimited amount and coverage in respect of pollution risks for a
minimum of five hundred million dollars ($500,000,000) plus an
additional two hundred million dollars ($200,000,000) or such other
amount as may be then customary for prudent shipowners to maintain,
including coverage against liabilities to persons who have suffered any
loss, damage or injury whatsoever in connection with anything done or
not done by the Vessel, any charterer or the Shipowner in connection
with the Vessel or the employment or use thereof (including in
connection with any oil or other substance emanating from the Vessel or
any other vessel with which the Vessel may be involved in collision) and
against liability under the United States Oil Pollution Act of 1990
("OPA") or any re-enactment or modification thereof under the law of any
country into whose jurisdiction the Vessel is permitted to come under
the terms of the related charter;
(vi) such additional insurance as the Shipowner may deem
necessary; provided, however, that all such additional insurance,
including without limitation "disbursements," "increased value" or other
"total loss only" insurance shall not be in amounts in excess of those
permitted by the hull and machinery or war risk policies. Such hull and
machinery insurance shall be effected on Institute of London
Underwriters "Institute Time Clause - (Hulls)" or American Institute
"Time (Hulls) Clauses" including four-fourths (4/4ths) Running Down
Clause, except that three-fourths (3/4ths) Running Down Clause is
allowed provided the remaining one-fourth (1/4th) Running Down Clause is
fully covered by protection and indemnity insurance;
(vii) risks which are likely to arise due to the particular usage
and trading of the Vessel including all risks customarily and usually
covered by prudent shipowners; and
(viii)risks for which the Bahamas may from time to time require
insurance or for which the Mortgagee may from time to time (after
receiving advice from its insurance advisers that a prudent shipowner
would obtain and maintain a type and amount of insurance for such risks)
require insurance.
Provided, however, that if the Vessel is subject to the Initial Charter
or an Acceptable Replacement Charter, the insurance requirements related to
the Initial Charter or an Acceptable Replacement Charter will supersede the
above insurance requirements.
(b) All insurance taken out or effected in connection with the Vessel
pursuant to the provisions of Section 4.03(a) hereof shall be in a form and
upon terms acceptable to the Mortgagee and shall, without limitation, be
subject to the following:
(i) all such insurance shall be taken out in the name of the
Shipowner (other than Section 4.03(a)(v)) with the Mortgagee's interest
noted on the policies and cover notes;
(ii) all such insurance shall be placed in the English or
American markets through first-class brokers and with first-class
underwriters, insurance companies, protection and indemnity associations
or protection and indemnity clubs. All insurance policies or entries
shall provide that they are payable in Dollars. All insurance policies
shall be valued policies and none shall provide for a deductible amount
in excess of One Hundred Thousand United States Dollars (US$100,000) or
such other amount as prudent shipowners of vessels similar to the Vessel
shall maintain. No insurance shall exclude liability for negligence of
the master, officers, crew or pilots. Each policy or entry shall
contain or be accompanied by a waiver, as against the Mortgagee, of any
and all premiums and calls for which the Mortgagee might otherwise be or
become liable as a loss payee or otherwise.
(iii) Each policy shall provide that it may not lapse, be
terminated, cancelled or materially modified without fourteen (14) days'
prior telex or telegraphic notice to the Mortgagee and any assignee,
except only such notice as war risk underwriters shall be required to
give pursuant to the automatic termination clause of current war risk
policies.
(iv) Each policy shall include a provision agreeing that no
breach of warranty or condition or want of due diligence on the part of
the Shipowner or any agent of the Shipowner shall defeat recovery of any
claim by the Collateral Trustee, as assignee of the Mortgagee, unless
such provision shall conflict with the available reinsurance
arrangements of the Issuers of such policy.
(c) Each insurance policy taken out pursuant to Sections 4.03(a)(i)
through (iii) and Section 4.03(a)(v) through (vii) shall contain the following
notice of assignment and loss payable clause:
Notice of Assignment/Loss Payable Clause
California Petroleum Transport Corporation, as mortgagee
(the "Mortgagee"), and CalPetro Tankers (Bahamas I) Limited (the
"Shipowner"), owner of the m.t. Condoleezza Rice (the "Vessel"),
hereby give notice that by an assignment contained in an
Assignment of Earnings and Insurances, dated as of _________ __,
1994, between the Shipowner and the Mortgagee, the Shipowner
assigned to the Mortgagee as mortgagee of the Vessel, inter alia,
all of its right, title and interest under, to and in all policies
and contracts of insurance of whatsoever nature and all entries
with protection and indemnity clubs or societies now or hereafter
taken out in respect of the Vessel, its rights, disbursements,
profits or otherwise.
All claims payable shall be subject to the following
conditions:
(i) Any claim payable in respect of an actual or
constructive or arranged or agreed or compromised total loss, or
loss in the event of the confiscation, compulsory acquisition or
requisition of the Vessel, for title or use, by any government of
any country or any department, agency or representative thereof,
pursuant to any present or future law, proclamation, order, decree
or otherwise, shall be payable to the Mortgagee as mortgagee of
the Vessel, provided always that the written consent of the
Mortgagee shall be obtained prior to the arranged or agreed or
compromised total loss being agreed with the underwriters
(insurers);
(ii) All other claims shall be released to the repairer or
salvor for the repair, salvage or other charges involved or to the
Shipowner as reimbursement if it has fully repaired the damages
and paid all of the salvage and other charges;
Notwithstanding the foregoing, if there exists an Event of Default
under the First Priority Statutory Mortgage and Deed of Covenants
collateral thereto, dated _________ __, 1994, on the Vessel given
by the Shipowner in favor of the Mortgagee and the brokers and/or
underwriters (insurers) have been so notified by the Mortgagee, all
claims shall be payable to the Mortgagee as mortgagee of the
Vessel.
The underwriters (insurers) agree that the Mortgagee shall
be advised immediately of the variation or termination of this
policy (entry), and in the event of any failure by the Shipowner to
pay premiums (dues or Club calls) as and when due the Mortgagee
shall be given at least fourteen (14) days' prior telegraphic or
telex notice of the cancellation or material alteration of this
policy (entry).
The Mortgagee shall have no obligations whatsoever to pay
any premiums or costs (dues or Club calls), but shall have the
right to do so in the event of non-payment by the Shipowner. The
underwriters (insurers) shall promptly advise the Mortgagee of any
act of omission of which the Underwriters (insurers) are aware that
might void this policy (entry) or make the same invalid or
unenforceable in whole or in part.
(d) Each entry or insurance policy taken out pursuant to Section
4.01(a)(iv) shall bear the following Endorsement:
Endorsement
California Petroleum Transport Corporation, as mortgagee
(the "Mortgagee") and CalPetro Tankers (Bahamas I) Limited (the
"Shipowner"), owner of the m.t. Condoleezza Rice (the "Vessel"),
hereby give notice that by an assignment contained in an
Assignment of Earnings and Insurances, dated as of _________ __,
1994, between the Shipowner and the Mortgagee, the Shipowner
assigned to the Mortgagee as mortgagee of the Vessel all of its
right, title and interest under, to and in all policies and
contracts of insurance of whatsoever nature and all entries with
protection and indemnity clubs or societies now or hereafter taken
out in respect of the Vessel, its rights, disbursements, profits
or otherwise.
It is hereby noted that all claims shall be paid to the
Shipowner unless and until the Mortgagee shall have given notice
in writing that the Shipowner is in default under the First
Priority Statutory Mortgage and Deed of Covenants collateral
thereto, dated as of _________ __, 1994, on the Vessel given by
the Shipowner in favor of the Mortgagee in which event such claims
shall be payable to the Mortgagee as mortgagee of the Vessel. Any
modification of the terms of this insurance or cancellation or
termination by reason of nonpayment of premiums, dues,
assessments, contributions or other amounts which may become due
shall not become effective against the interests of the Mortgagee,
its successors or assigns until fourteen (14) days' prior
telegraphic or telex notice is given to the Mortgagee, its
successors or assigns of such modification, cancellation or
termination.
(e) Certified copies of all binders and cover notes or other
satisfactory written evidence showing that the required insurance of each type
has been placed, maintained or renewed and that the premiums thereon have been
paid shall be submitted to the Mortgagee on or before the date of this Deed
and the Statutory Mortgage and subsequently pro forma policies shall be
submitted for approval at least seven (7) days before liability under any
current or renewed insurance expires. No change shall be made in any
insurance without the prior written approval of the Mortgagee. Certified
copies of all policies, certificates of entry, contracts of insurance, cover
notes and renewals thereof shall be delivered to and held by the Mortgagee, and
the Shipowner shall furnish the Mortgagee with the original of the policies,
when and if requested by the Mortgagee. On the Closing Date, on each date the
Insurances are renewed as required by the terms hereof and each time there is
a significant change in the insurance coverage carried on the Vessel, the
Shipowner shall arrange for a detailed report signed by independent marine
insurance brokers acceptable to the Mortgagee, describing the insurance
coverage then carried and maintained on the Vessel (including the types of
risk covered by such policies, the amount insured thereunder and the expiration
date thereof) and stating that in the opinion of said insurance brokers such
insurance is adequate and reasonable for the protection of the Mortgagee and
that the Shipowner is in compliance with the insurance terms hereof.
(f) The Mortgagee is hereby authorized, but not required, in its own
name and/or the Shipowner's name to demand, collect, give receipt for and
prosecute all necessary actions in the courts to recover any and all insurance
monies which may become due and payable to the Shipowner under any insurance
required or permitted hereunder.
(g) If the Shipowner shall at any time fail to pay or to cause to be
paid when due any insurance premiums, club calls or other costs related to
obtaining or maintaining the insurance required hereunder, or to obtain any
required insurance or to deliver to the Mortgagee all policies, certificates
of entry, contracts of insurance, binders and cover notes and all renewals
thereof as required by the provisions of this Deed and the Statutory Mortgage,
the Mortgagee may, but shall not be required to, procure such insurances
and/or pay unpaid premiums and other costs, and the cost and expense thereof,
with interest at the Default Rate, shall be an indebtedness due from the
Shipowner to the Mortgagee secured by this Deed and the Statutory Mortgage and
shall be paid by the Shipowner promptly on demand.
(h) The Shipowner shall cause each of its insurance brokers to deliver
to the Mortgagee its undertaking substantially in the form of the letter
attached hereto as Exhibit A and made a part hereof.
(i) The Shipowner shall not do any act or cause or permit any act to
be done whereby any insurance shall be or may be suspended, impaired or
defeated.
(j) The Shipowner agrees to do all such things whatsoever and prepare,
execute and deliver all such documents whatsoever to enable the Mortgagee to
collect and recover any monies which may become due in respect of the policies
of insurance and entries and for that purpose (but without limitation) to
permit the Mortgagee if necessary to sue in the name of the Shipowner.
(k) The Shipowner agrees not to employ the Vessel or suffer the Vessel
to be employed otherwise than in conformity with the terms of the instruments
of insurance aforesaid (including any warranties express or implied therein)
without first obtaining the consent to such employment of the insurers and
complying with such requirements as to extra premium or otherwise as the
insurers may prescribe.
(l) The proceeds of any Insurances or entries shall be applied as
follows:
(i) Until the occurrence of an Event of Default:
(A) Any claim under any Insurances (other than in respect of a
Total Loss) or whether or not such claim is under the terms
of the relevant loss payable clause payable directly to the
Shipowner, shall be applied by the Shipowner in making good
the loss or damage in respect of which it has been paid to
the Shipowner in reimbursement of money expended by it for
such purpose; and
(B) Any claim in respect of protection and indemnity insurance
shall be paid directly to the person, firm or company to
which the liability covered by such insurance was incurred
or the Shipowner in reimbursement of moneys expended by it
in satisfaction of such liability;
provided always that for as long as the Charter in respect of the Vessel
remains in force, all payments other than in respect of a Total Loss
(which shall be made to the Mortgagee) shall be made to the Charterer.
(ii) Upon the occurrence of an Event of Default, subject as provided
above, any claim under any such insurance and entry shall be paid to the
Mortgagee, as assignee of the related Shipowner, and shall be applied by the
Mortgagee pursuant to the terms of the Charter unless the Charterer is in
default thereunder in which event the Mortgagee shall apply such proceeds
against payment of the Obligations.
(iii) Any claim under such insurance and entry in respect of a Total
Loss shall be paid to the Mortgagee, as assignee of the related Shipowner, and
shall be applied by the Mortgagee, after payment of the costs of collecting
such claim, as follows:
First: To the payment of all reasonable expenses and
charges, including the expenses of any taking, attorney's fees,
court costs and any other expenses or advances made or incurred by
the Mortgagee in the protection of its right or the pursuance of
its remedies under this Deed and the Statutory Mortgage, the Loan
Agreements or the other Security Documents;
Second: To the payment of all amounts due to the Mortgagee
in respect of taxes, indemnities, fees, expenses, premiums,
purchase of liens or otherwise under the provisions of this Deed
and the Statutory Mortgage;
Third: To the payment of interest on the Term Loan and
Serial Loan, pro rata, in accordance with their respective
outstanding balances, to but not including the Loss Date;
Fourth: To the payment to the Mortgagee in respect of
principal of the Term Loan and Serial Loan, pro rata, in
accordance with their respective outstanding balances; and
Fifth: To the payment of any surplus thereafter remaining
to the Shipowner or whomsoever may be lawfully entitled thereto.
Section 4.04 Defense of Title.
The Shipowner lawfully owns and is lawfully possessed of the
Vessel free from any Lien whatsoever except this Deed, the Statutory Mortgage
and Permitted Liens and shall warrant and defend the title and possession
thereto and to every part thereof for the benefit of the Mortgagee against the
claims and demands of all persons whomsoever.
Section 4.05 Discharge of Liens.
The Shipowner shall pay and discharge or cause to be paid and
discharged when due and payable unless contested in good faith from time to
time all debts, damages and liabilities whatsoever which may have given or may
give rise to maritime or possessory liens on or claims enforceable against the
Vessel and all taxes, assessments, governmental charges, fines and penalties
legally imposed on the Vessel or any income or proceeds therefrom or on the
Shipowner, the Earnings and in event of arrest of the Vessel pursuant to legal
process or in event of her detention in exercise or purported exercise of any
such lien as aforesaid to procure the release of the Vessel from such arrest
or detention as soon as possible upon receiving notice thereof but in any
event within fifteen (15) days of receiving such notice by providing bail or
otherwise as the circumstances may require.
Section 4.06. Liens.
(a) Neither the Shipowner nor its agent nor the master of the
Vessel nor any charterer of the Vessel has or shall have any right, power or
authority to create, incur or permit to be placed or imposed upon the property
or any part thereof subject or intended to be subject to this Deed and
Statutory Mortgage, any liens whatsoever without the prior written consent of
the Mortgagee, other than for Permitted Liens. A properly certified copy of
this Deed and the Statutory Mortgage shall be carried with the ship's papers
on board the Vessel, shall be exhibited to any person having business with the
Vessel which might give rise to any lien other than Permitted Liens and shall
be exhibited to any representative of the Mortgagee on demand.
(b) The Shipowner shall keep the Vessel free and clear of all
liens, security interests, charges or encumbrances (except for the Charter and
Permitted Liens).
Section 4.07 Use of Vessel.
(a) The Shipowner shall not cause or permit the Vessel to be
operated in such a way as to jeopardize the safety of the Vessel, its
Insurances or in any manner contrary to law, shall not engage in any unlawful
trade or violate any applicable law, rule or regulation of the Bahamas or any
other jurisdiction in which the Vessel may operate from time to time or which
may otherwise be applicable to the Vessel or the Shipowner or carry any cargo
that shall expose the Vessel to penalty, confiscation, forfeiture, capture or
condemnation, shall not do or suffer or permit to be done anything which can
or may injuriously affect the registration or enrolment of the Vessel under
the laws and regulations of Bahamas and shall at all times keep the Vessel duly
documented thereunder.
(b) The Shipowner shall not employ the Vessel or suffer her
employment in any trade or business which is forbidden by international law or
is otherwise illicit or in carrying illicit or prohibited goods or otherwise
use the Vessel in any manner whatsoever which renders her liable to
condemnation or to destruction, seizure or confiscation and in event of
hostilities in any part of the world (whether war is declared or not) not
allow the Vessel to enter any zone which is declared a war zone unless the
Mortgagee shall have first given its consent thereto in writing and there
shall have been effected by the Shipowner and at its expense such special
insurance cover as the Mortgagee may require.
(c) The Shipowner shall not, during hostilities (whether or not
a state of war shall have been formally declared) between any two or more
nations or in which the United Nations Organization may be involved, or during
any civil war, employ or permit the Vessel to be employed in any manner in
carrying any goods that shall or may be declared to be contraband of war or
that shall or may render her liable to confiscation, seizure, detention or
destruction unless prior to such employment special war risks policies
effected with such underwriters as the Mortgagee may approve and in all
respects to the satisfaction of the Mortgagee shall have been effected,
assigned and delivered to the Mortgagee.
(d) Upon request, the Shipowner shall give to the Mortgagee all
information regarding the Vessel, her position and engagements in the
possession of or available to the Shipowner.
(e) The Shipowner shall comply with and satisfy all of the
material provisions of any applicable law, regulation, proclamation or order
concerning financial responsibility for liabilities imposed on the Shipowner
or the Vessel with respect to pollution by any state or nation or political
subdivision thereof, including, if applicable, the United States Federal Water
Pollution Control Act, OPA and the United States Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), as any of the foregoing
may at any time be amended, and shall maintain all certificates or other
evidence of financial responsibility as may be required by any such law,
regulation, proclamation or order with respect to the trade in which the
Vessel is from time to time engaged and the cargo carried by it and shall upon
request, furnish the Mortgagee with evidence that the Shipowner has acted in
compliance with OPA and CERCLA.
Section 4.08 Notifications.
The Shipowner shall immediately notify the Mortgagee of:
(a) any marine disaster involving the Vessel that has occurred,
or any serious damage suffered by the Vessel (such notice by the
Shipowner to be given within twenty-four (24) hours after the event
shall have come to its knowledge and shall furnish the Mortgagee with
full information regarding any loss of life, other accidents or damage to
the Vessel), and in such event the Mortgagee shall have the right to
have an independent survey of the damage to the Vessel at the
Shipowner's expense provided that the same shall not cause any undue
delay in respect of the operation of the Vessel, and if such survey be
requested, the Shipowner shall lend all needed assistance.
(b) any occurrence in consequence whereof the Vessel has become
or is likely to become a Total Loss;
(c) any requirement or recommendation made by any insurer or
classification society or by any competent authority that is not
complied with immediately; and
(d) any complaint or libel filed against the Vessel, or any levy
against the Vessel, or the fact that the Vessel has been taken into
custody or detained by any proceedings in any court or tribunal or by
any government of any country or other authority, any arrest of the
Vessel or the exercise or purported exercise of any lien on the Vessel.
Section 4.09 Payment of Crew's Wages and Allotments.
The Shipowner shall promptly pay all tolls, dues and other
outgoings whatsoever in respect of the Vessel and, as and when the Mortgagee
may so require, furnish satisfactory evidence that the wages and allotment and
insurance and pension contributions of the Master and crew are being regularly
paid and that all deductions from crew's wages in respect of any tax liability
are being properly accounted for.
Section 4.10 Charter of Vessel.
The Shipowner shall not, without the prior written consent of the
Mortgagee, charter the Vessel by demise charter or by period, time or voyage
charter for any period other than to the Charterer under the Charter or any
other charterer under an Acceptable Replacement Charter. The Shipowner shall
not modify, amend or supplement the terms of the Charter without the prior
written consent of the Mortgagee.
Section 4.11 Maintenance of Vessel.
The Shipowner shall at all times and without cost or expense to
the Mortgagee or the Collateral Trustee maintain and preserve, or cause to be
maintained and preserved, the Vessel, her equipment and machinery in good
running order and repair so that the Vessel shall be, in so far as due
diligence can make her so, tight, staunch, strong and well and sufficiently
tackled, apparelled, furnished, equipped and in every respect seaworthy and in
good operating condition as will entitle her to the highest classification of
the Classification society or such other classification society of like
standing agreeable to the Mortgagee and the Trustee. The Vessel shall, and
the Shipowner covenants that it shall, at all times comply strictly with all
applicable laws, treaties and conventions of Bahamas and rules and regulations
issued thereunder and shall have on board as and when required by such rules
and regulations valid certificates showing compliance therewith. The
Shipowner shall not make or permit to be made any substantial change in the
structure, type or speed of the Vessel or change in any of her rigs without
first obtaining the written approval of the Mortgagee. The Shipowner shall
cause all repairs to and/or replacements of any damaged worn or lost parts or
equipment of the Vessel be effected in such manner both as regards workmanship
and quality of materials so as not to diminish the value or class of the
Vessel. The Shipowner shall submit the Vessel to such periodical or other
surveys as may be required for classification purposes and shall if so
required by the Mortgagee supply to the Mortgagee on request copies of all
surveys or reports issued in respect thereof.
Section 4.12 Statement of Classification Society.
The Shipowner shall furnish to the Mortgagee and the Collateral
Trustee annually from the date hereof a certificate by Det norske Veritas or
such other classification society acceptable to the Mortgagee and the
Collateral Trustee that such classification is maintained in the highest
category for ships of the same type as the Vessel free of recommendations and
notations which have not been complied with in accordance with their terms and
to furnish the Mortgagee from time to time and at any time upon demand with
all such information and copies of all such documents as the Mortgagee may
require concerning the classification of the Vessel.
Section 4.13 Surveys of Vessel.
The Shipowner shall submit the Vessel or cause the Vessel to be
submitted regularly to such periodical or other surveys as may be required for
classification purposes and if so required supply and cause to be supplied to
the Mortgagee copies of all survey reports issued in respect thereof.
Section 4.14 Access to Vessel.
The Shipowner shall use all reasonable endeavors to afford the
Mortgagee and such Persons as the Mortgagee shall from time to time appoint
for that purpose full and complete access to the Vessel at any time, on
reasonable notice and in a manner which shall not interfere with the Vessel's
trading requirements to view the state and condition thereof and her cargo and
papers and to ascertain whether the Vessel is being properly repaired and
maintained, and if default shall be made in keeping her in such good state of
repair and in such working order and condition as herein mentioned (without
prejudice however to any of the Mortgagee's rights under this Deed and the
Statutory Mortgage) the Mortgagee may (but shall not be obligated to) effect
such repairs as shall in its opinion be necessary, and the Shipowner shall on
demand repay to the Mortgagee every sum of money expended for the above
purpose with interest at the Default Rate.
Section 4.15 Books and Records.
The Shipowner shall keep proper books of account in respect of the
Vessel and as and when required by the Mortgagee make such books available for
inspection for the Mortgagee.
Section 4.16 Registration of Statutory Mortgage; Recordation of
Statutory Mortgage.
(a) The Shipowner shall not change the flag or port of
documentation of the Vessel or through any action or inaction cause the
registration of the Vessel under the laws of the Commonwealth of the Bahamas
to be void or voidable or to lapse;
(b) The Shipowner shall cause this Statutory Mortgage to be
recorded or filed in a central office or at the home port of the Vessel and in
accordance with the applicable provisions of the law of the Bahamas and will
otherwise comply with and satisfy all the requirements and formalities
established by the provisions of the law of the Bahamas and any other
pertinent legislation of the Bahamas to perfect this Statutory Mortgage as a
valid and enforceable first and preferred lien upon the Vessel and maintain
this Deed as a first priority assignment of, charge over, and security
interest in the Vessel or other property assigned thereunder and shall furnish
to the Mortgagee from time to time such evidence to the Mortgagee's
satisfaction with respect to the Shipowner's compliance with the provisions of
this Section.
Section 4.17 Notice of Mortgage.
(a) The Shipowner shall at all times carry on board the Vessel a
duly certified copy of this Deed and a properly certified copy of the
Statutory Mortgage and any assignment thereof (which shall form a part of the
Vessel's papers) and cause the same to be shown to any person having business
with the Vessel which might create or imply any commitment or encumbrance
whatsoever on the Vessel and place and maintain in a frame in a conspicuous
place in the navigation room and in the cabin of the Master of the Vessel a
printed notice such that the printed area covers a space not less than six
inches wide by nine inches high in the following form:
"NOTICE OF FIRST MORTGAGE"
"This Vessel is owned by CalPetro Tankers (Bahamas I) Limited and
is subject to a First Priority Statutory Mortgage and Deed of
Covenants collateral thereto in favor of California Petroleum
Transport Corporation, as mortgagee. Under the terms of said Deed,
neither the Shipowner nor any charterer nor the master of this
Vessel nor any other person has any power, right or authority
whatever to create incur or permit to be imposed on this Vessel
any lien or encumbrance except for Master's and crew's wages for
not more than three (3) months and salvage."
(b) Notwithstanding the requirement for the Shipowner to
maintain the Notice of Mortgage described in Section 4.17(a), so long as the
Charter is in effect, the Shipowner shall maintain the Notice of First
Mortgage described in Clause 14 of the Charter.
Section 4.18 Further Assurances.
(a) The Shipowner shall pay to the Mortgagee on demand on a full
indemnity basis all moneys whatsoever which the Mortgagee shall or may expend,
be put to or become liable for in or about the protection maintenance or
enforcement of the security created by this Deed, the Statutory Mortgage and
the other Security Documents or in or about the exercise by the Mortgagee of
any of the powers vested in the Mortgagee hereunder or thereunder including
any and all costs, charges, legal fees and expenses of the Mortgagee and shall
pay interest thereon at the Default Rate until the date of repayment by the
Shipowner both before and after judgment.
(b) The Shipowner shall do and permit to be done each and every
act or thing whatsoever which the Mortgagee may require to be done for the
purpose of enforcing the Mortgagee's rights hereunder and to allow the
Mortgagee to use the Shipowner's name as may be required for that purpose.
Section 4.19. Withholding Tax.
The Shipowner shall take any lawful action to the extent necessary
to prevent or avoid the imposition of any withholding taxes (other than any
withholding tax with respect to charterhire to the extent required to be paid
or reimbursed by any charterer pursuant to a charter) by any taxing
jurisdiction (including The Bahamas) with respect to any payments under the
Obligations, including changing its jurisdiction of incorporation or
residence; provided however, that it shall not be required to take, or fail to
take, any action (i) if in the opinion of counsel such act or failure to act
would violate applicable law or (ii) if in the reasonable opinion of the
Shipowner the actions necessary to avoid or prevent imposition of such
withholding taxes would be unduly burdensome. For purposes of clause (ii) of
this paragraph a requirement to change the jurisdiction of the Shipowner's
incorporation or residence shall not be treated as unduly burdensome.
Section 4.20. Expenses.
The Shipowner shall upon demand pay to the Mortgagee (or as it may
direct) the amount of all investigation expenses, mortgage taxes, recording
charges, filing fees, revenue and documentary stamps and any other charges
incurred by the Mortgagee in connection with the preparation, completion or
registration of this Deed and the Statutory Mortgage, including without
limitation the reasonable expenses and fees of counsel to the Mortgagee.
Likewise any and all expenses incurred at any time by the Mortgagee with
respect to the mortgaged property or the protection or the enforcement of its
rights hereunder or thereunder, including without limitation the expenses and
fees of counsel to the Mortgagee, shall be paid by the Shipowner or, if paid by
the Mortgagee, shall be paid by the Shipowner promptly upon demand together
with interest thereon from the date of demand until such repayment at the
Default Rate in effect from time to time. The payment of all expenses and
other amounts under this Section 4.20 shall be secured by this Deed and the
Statutory Mortgage and no amounts payable by the Shipowner to the Mortgagee
under this Section 4.20 shall in any circumstances be repayable to the
Shipowner.
Section 4.21. Indebtedness.
The Shipowner will not directly or indirectly, create, incur,
issue, assume, guarantee or otherwise become directly or indirectly liable
with respect to, or become responsible for the payment of any indebtedness,
except for the obligations under the Shipowner's Loan Agreements.
Section 4.22. Business of Shipowner.
The Shipowner will not engage in any business other than the
ownership and operation of its Vessel as described herein and in accordance
with the Shipowner's charter and by-laws.
Section 4.23. No Bankruptcy Petition.
The Shipowner will not (i) commence any case, proceeding or other
action under any existing or future bankruptcy, insolvency or similar law
seeking to have an order for relief entered with respect to it, or seeking
reorganization, arrangement, adjustment, winding up, liquidation, dissolution,
composition or other relief with respect to its debt, (ii) seek appointment
of a receiver, trustee, custodian or other similar official for it or any part
of its assets, (iii) make a general assignment for the benefit of creditors or
(iv) take any action in furtherance of, or consenting or acquiescing in, any
of the foregoing.
Section 4.24. Consolidation, Merger and Sale of Assets.
The Shipowner shall not consolidate with, merge with or into, any
other Person or convey or transfer to any Person all or any part of the Vessel.
Section 4.25. Loans, Advances and Other Liabilities.
The Shipowner will not make any capital contributions, advances or
loans to, or investments or purchases of capital stock in, any Person, except
for Allowable Investments.
Section 4.26. Restricted Payment.
The Shipowner will not make any Restricted Payment except as set
forth in the Loan Agreement.
ARTICLE V
EVENTS OF DEFAULT; REMEDIES
Section 5.01 Events of Default.
The following shall constitute Events of Default hereunder:
(a) An Event of Default shall occur under either the Serial Loan
Agreement, the Term Loan Agreement or any Other Loan Agreement;
(b) Default in the payment of any sums payable under the Deed and the
Statutory Mortgage to the Mortgagee within two (2) Business Days
after such amount was due;
(c) Default by the Shipowner in the due observance or performance of
any covenant set forth in Sections 4.02, 4.03, 4.04, 4.06, 4.10,
4.16 and 4.26;
(d) Default in any material respect in the performance, or breach in
any material respect, of any covenant of the Shipowner (other than
Sections 4.02, 4.03, 4.04, 4.06, 4.10, 4.16 and 4.26) or if any
representation or warranty of the Shipowner made in the Deed or
the Statutory Mortgage or in any certificate or other writing
delivered pursuant thereto or in connection therewith with respect
to or affecting the Vessels shall prove to be inaccurate in any
material respect as of the time when the same shall have been
made, and, if such breach or default or inaccuracy is curable,
continuance of such default or breach or inaccuracy for a period
of 30 days after the earlier to occur of (a) actual knowledge of
such default, breach or inaccuracy by the Shipowner or (b) the
date on which there has been given by registered or certified mail
to the Shipowner by the Mortgagee a written notice thereof;
(e) The entry of a decree or order for relief by a court having
jurisdiction over the Shipowner and its assets in any involuntary
case under any applicable federal or state bankruptcy, insolvency,
or other similar law of any relevant jurisdiction now or hereafter
in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, or sequestrator (or other similar official)
for the Shipowner or for any substantial part of its property, or
ordering the winding up or liquidation of its respective affairs,
and the continuance of any such decree or order unstayed and in
effect for a period of 60 consecutive days;
(f) The commencement by the Shipowner of a voluntary case under any
applicable federal or state bankruptcy, insolvency, or other
similar law of any relevant jurisdiction now or hereafter in
effect in any jurisdiction, or the consent by the Shipowner to the
appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee or sequestrator (or other similar
official) of the Shipowner or any substantial part of its
property, or the making by the Shipowner of any general assignment
for the benefit of creditors, or the failure by the Shipowner
generally to pay its debts as they become due, or the taking of
action by the Shipowner in furtherance of any such action;
(g) The Vessel is deemed a Total Loss and the insurance proceeds
thereof have not been received by the Mortgagee within 60 days
after the date on which the Vessel was deemed a Total Loss;
provided, however, if the Vessel is under charter to the Charterer
pursuant to the Charter, such an event shall be an Event of Default
under this Deed and the Statutory Mortgage if the Mortgagee has
not received the amount payable by the Charterer in the event of a
Total Loss pursuant to the Charter within 5 business days of the
date on which such amounts are due pursuant to the Charter;
(h) The Shipowner shall abandon the Vessel;
(i) A default (as described in Clause 18 of the Charter) shall have
occurred under the Charter; or
(j) This Deed and the Statutory Mortgage or any material provision
hereof or thereof shall be deemed invalidated in whole or in part
by any present or future law of the Bahamas or decision of any
competent court.
Section 5.02 Remedies.
In the event any one or more Events of Default shall have occurred
and be continuing, then, in each and every such case the Mortgagee, shall have
the right to:
(a) declare immediately due and payable all of the Obligations (in
which case all of the same shall be immediately due), and bring
suit at law, in equity or in admiralty, as it may be advised, to
recover judgment for the Obligations and collect the same out of
any and all property of the Shipowner whether covered by the Deed,
the Statutory Mortgage or otherwise;
(b) exercise all of the rights and remedies in foreclosure and
otherwise given to mortgagees by the provisions of applicable law;
(c) take and enter into possession of the Vessel, at any time,
wherever the same may be, without court decision or other legal
process and without being responsible for loss or damage and the
Mortgagee may, without being responsible for loss or damage, hold,
lay-up, lease, charter, operate or otherwise use such Vessel for
such time and upon such terms as it may deem to be for its best
advantage, and demand, collect and retain all hire, freights,
earnings, issues, revenues, income, profits, return premiums,
salvage awards or recoveries, recoveries in general average, and
all other sums due or to become due in respect of such Vessel or in
respect of any insurance thereon from any person whomsoever,
accounting only for the net profits, if any, arising from such use
of the Vessel and charging upon all receipts from use of the
Vessel or from the sale thereof by court proceedings or by private
sale all costs, expenses, charges, damages or losses by reason of
such use, and if at any time the Mortgagee avails itself of the
right given to it to take the Vessel: (i) the Mortgagee shall have
the right to dock the Vessel for a reasonable time at any dock,
pier or other premises of the Shipowner without charge, or to dock
her at any other place at the cost and expense of the Shipowner,
and (ii) the Mortgagee shall have the right to require the
Shipowner to deliver, and the Shipowner shall on demand, at its
own cost and expense, deliver to the Mortgagee the Vessel as
demanded; and the Shipowner shall irrevocably instruct the master
of the Vessel so long as the Deed and the Statutory Mortgage are
outstanding to deliver the Vessel to the Mortgagee as demanded;
(d) sell the Vessel or any share therein with or without the benefit
of any charter party or other engagement by public auction or
private contract without legal process at any place in the world
and upon such terms as the Mortgagee in its absolute discretion
may determine with power to postpone any such sale and without
being answerable for any loss occasioned by such sale or resulting
from the postponement thereof and at any such public auction the
Mortgagee may become the purchaser and shall have the right to set
off the purchase price against the Obligations;
(e) to require that all policies, contracts and other records relating
to the Insurance (including details of and correspondence
concerning outstanding claims) be forthwith delivered to such
brokers as the Mortgagee may nominate;
(f) to collect, recover, compromise and give a good discharge for all
claims then outstanding or thereafter arising under any of the
Insurance and to take over or institute (if necessary using the
name of the Shipowner) all such proceedings in connection
therewith as the Mortgagee in its absolute discretion thinks fit
and to permit the brokers through whom collection or recovery is
effected to charge and retain the usual brokerage therefor;
(g) to discharge, compound, release or compromise claims in respect of
the Vessel which have given or may give rise to any charge or lien
on the Vessel or which are or may be enforceable by proceedings
against the Vessel under the laws of all countries to whose
jurisdiction the Vessel may from time to time become subject;
(h) pending sale of the Vessel to remove the Vessel or to require the
Vessel to be removed from any place where she may be or be lying
to any port, harbor, dock or other location for the purposes of
the Vessel docking, laying up, repair, management, employment,
maintenance, or sale or to preserve or maintain the Mortgagee's
security in the Vessel in such manner as the Mortgagee may in its
complete discretion deem necessary;
(i) to discharge, store, load, tranship and otherwise handle any cargo
for the time being on board the Vessel without liability to any
third party with regard thereto;
(j) pending sale of the Vessel to manage, insure, maintain and repair
the Vessel and to hold, lease, charter, operate, employ, lay up or
otherwise use the Vessel in such manner and for such period as the
Mortgagee in its absolute discretion deems expedient accounting
only for the net profits (if any) of such use and for the purposes
aforesaid the Mortgagee shall be entitled to do all acts and things
incidental or conducive thereto and in particular to enter into
such arrangements respecting the Vessel, her insurance,
management, maintenance, repair, classification and employment and
generally to do and cause to be done all such acts and things
whatsoever and to make all such arrangements whatsoever in respect
of the Vessel or the working of the same in all respects as if the
Mortgagee were the absolute and sole owner of the Vessel and
without being responsible for any loss and damage thereby
incurred; and
(k) to recover from the Shipowner on demand all expenses, payments,
disbursements, costs, losses and damages as may be incurred by the
Mortgagee whether the Mortgagee be in possession of the Vessel or
not or in exercise by the Mortgagee of any of the powers herein
contained together with interest thereon at the Default Rate and
such expenses, payments, disbursements, costs, losses and damages
together with the said interest thereon shall, until paid by the
Shipowner to the Mortgagee, be secured on the Vessel by this Deed
and the Statutory Mortgage.
Section 5.03 Sale of the Vessel.
(a) A sale of the Vessel made in pursuance of this Deed and the
Statutory Mortgage whether under the power of sale hereby granted or any
judicial proceedings shall operate to divest all right, title and interest of
any nature whatsoever of the Shipowner herein and thereto and shall bar the
Shipowner its successors and assigns and all persons claiming by through or
under them provided such sale is by auction and that nothing herein shall be
deemed to derogate from the Shipowner's duty to the Mortgagee. Upon any such
sale, the purchaser shall not be bound to see or inquire whether the
Mortgagee's power of sale has risen in the manner provided by the Deed and the
Statutory Mortgage and the sale shall be within the power of the Mortgagee and
the receipt of the Mortgagee for the purchase money shall effectively discharge
the purchaser who shall not be concerned with the manner of application of the
proceeds of sale or be in any way answerable or otherwise liable therefor.
The Mortgagee may bid for and purchase the Vessel and upon compliance with the
terms of sale may hold, retain and dispose of the Vessel without further
accountability therefor.
(b) The Shipowner hereby irrevocably appoints the Mortgagee and
its assigns as its true and lawful attorney with full power to act alone and
with full power of substitution until the due discharge of this Deed and the
Statutory Mortgage in accordance with the laws of the Bahamas to make all
necessary transfers of the Vessel sold pursuant to Section 5.02, including,
without limitation, executing and delivering all instruments of assignment and
transfer or quitclaim as the Mortgagee may require and the Shipowner hereby
does ratify and confirm all that its said attorneys shall lawfully do by
virtue hereof. Nevertheless, the Shipowner shall if so requested by the
Mortgagee ratify and confirm any such sale by executing and delivering to the
purchaser or purchasers of the Vessel such proper bills of sale, conveyances,
instruments of assignment and transfer or quitclaim and releases as may be
designated in such request.
Section 5.04 Mortgagee as Attorney-in Fact.
The Mortgagee is hereby appointed attorney-in-fact of the
Shipowner and upon the Indebtedness becoming due and payable in the name of
the Shipowner to demand, collect, receive, compromise and sue for so far as
may be permitted by law all freights, hire, earnings, issues, revenues, income
and profits of the Vessel and all amounts due from underwriters under any
insurance thereon as payment of losses or as return premiums or otherwise
salvage awards and recoveries in general average or otherwise and all other
sums due or to become due upon the Indebtedness becoming due and payable in
respect of the Vessel or in respect of any insurance thereon from any person
whomsoever and to make and give and execute in the name of the Shipowner
acquittances, receipts, releases or other discharges for the same whether under
seal or otherwise and to endorse and accept in the name of the Shipowner all
checks, notes, drafts, warrants, agreements and all other instruments in
writing with respect to the foregoing.
Section 5.05 Appointment of Receiver.
Whenever any right to enter and take possession of the Vessel
accrues to the Mortgagee, the Mortgagee may require the Shipowner to deliver
and the Shipowner shall on demand at its own cost and expense deliver to the
Mortgagee the Vessel as demanded. If any legal proceedings shall be taken to
enforce any right under this Deed and the Statutory Mortgage, the Mortgagee
shall be entitled as a matter of right to the appointment of a receiver of the
Vessel and the freights, hire, earnings, issues, revenues, income and profits
due or to become due and arising from the operation thereof.
Section 5.06 Arrest or Detention of Vessel.
In the event that the Vessel shall be arrested or detained by any
marshal or other officer of any court of law, equity or admiralty jurisdiction
in any country or nation of the world or by any government or other authority
and shall not be released from arrest or detention within fifteen (15) days
from the date of arrest or detention, the Shipowner hereby authorizes and
empowers the Mortgagee, its successors or assigns, to apply for and receive
possession of or to take possession of the Vessel with all the rights and
powers that the Shipowner or its successors or assigns may have, possess and
exercise in any such event, and this power of attorney shall be irrevocable
and may be exercised not only by the Mortgagee but also by an assignee or
appointee of the Mortgagee with full power of substitution to the same extent
and effect as if such assignee or appointee has been named by express
designation.
Section 5.07 Defense of Suits.
The Shipowner also authorizes and empowers the Mortgagee, and its
successors, assigns and appointees, to appear in the name of the Shipowner,
and its successors and assigns, in any court of any country or nation of the
world where a suit is pending against the Vessel because of or on account of
any alleged lien against the Vessel from which the Vessel has not been
released and to take such proceedings and do such things as to them or any of
them may seem proper toward the defense of such suit and the discharge of such
lien, and all monies expended by them or any of them for the purpose of such
defense and/or discharge shall be a debt due from the Shipowner, and its
successors and assigns, to the Mortgagee, and its successors and assigns, and
payment thereof together with interest thereon at the Default Rate (to the
extent permitted by law) from time to time in effect shall be secured by the
lien of this Deed and the Statutory Mortgage in like manner and extent as if
the amount and description thereof were written herein.
Section 5.08 Cumulative Rights, Powers and Remedies.
(a) Each and every right, power and remedy herein given to the
Mortgagee shall be cumulative and shall be in addition to every other right,
power and remedy herein given or now or hereafter existing at law, in equity,
admiralty or by statute and each and every power and remedy whether herein
given or otherwise existing may be exercised from time to time and as often
and in such order as may be deemed expedient by the Mortgagee, and the
exercise or the beginning of the exercise of any right, power or remedy shall
not be construed to be a waiver of the right to exercise at the same time or
thereafter any other power or remedy.
(b) No delay or omission of the Mortgagee to exercise any right
or power vested in it under the Security Documents or any of them shall impair
such right or power or be construed as a waiver of or as acquiescence in any
default by the Shipowner, nor shall the acceptance by the Mortgagee of any
security or any payment on account of the Indebtedness, although made after
default, be deemed a waiver of any right arising out of any future default or
of any past default, and in the event of the Mortgagee at any time agreeing to
waive any such right or power such waiver shall be revocable by the Mortgagee
at any time and the right or power shall henceforth be again exercisable as
though there had been no such waiver.
(c) In the event the Mortgagee shall have proceeded to enforce
any right or pursue any power under this Deed and the Statutory Mortgage by
foreclosure, entry or otherwise and such proceedings shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely to the Mortgagee, then and in every such case the Shipowner and the
Mortgagee shall be restored to their former positions and rights hereunder
with respect to the property subject or intended to be subject to this Deed
and the Statutory Mortgage and all rights, remedies and powers of the
Mortgagee shall continue as if no such proceedings had been taken.
Section 5.09 Application of Proceeds.
The proceeds of any sale made either under the power of sale
hereby granted to the Mortgagee or under a judgment or decree in any judicial
proceeding for the foreclosure of this Deed and the Statutory Mortgage or for
the enforcement of any remedy granted to the Mortgagee hereunder, or any net
earnings arising from the management, charter or other use of the Vessel by
the Mortgagee under any of the powers herein reserved, any amounts on deposit
to the credit of the Shipowner or the Mortgagee from earnings of the Vessel as
provided herein and any other moneys received by the Mortgagee pursuant to the
terms of this Deed and the Statutory Mortgage or in any proceeding hereunder
other than under Section 4.03(l)(ii), the application of which is not
elsewhere herein specifically provided for, shall be applied as follows:
First: To the payment of all reasonable expenses and
charges, including the expenses of any taking, attorney's fees,
court costs and any other expenses or advances made or incurred by
the Mortgagee in the protection of its right or the pursuance of
its remedies under the Loan Agreements, this Deed or the Statutory
Mortgage;
Second: To the payment of all amounts due to the Mortgagee
in respect of taxes, indemnities, fees, expenses, premiums,
purchase of liens or otherwise under the provisions of this Deed
and the Statutory Mortgage;
Third: To the payment of interest on the Term Loan and
Serial Loan, pro rata, in accordance with their respective
outstanding balances;
Fourth: To the payment of principal on the Term Loan and
Serial Loan, pro rata, in accordance with their respective
outstanding balance;
Fifth:To the payment of any amounts due and owing under the
Other Loans, pro rata, in the event of an acceleration of the
principal amount of such Other Loans; and
Sixth: To the payment of any surplus thereafter remaining
to the Shipowner or whomsoever may be lawfully entitled thereto.
The Shipowner has and shall have no personal liability or
obligation with respect to the amounts specified in paragraphs "FIRST" through
"FIFTH" above, which are payable solely from the income and proceeds received
by the Mortgagee from the Mortgagee's right, title and interest in and to the
Vessel.
Section 5.10 Mortgagee's Right to Remedy Defaults.
If the Shipowner shall default in the performance or observance of
any of the covenants in this Deed or the Statutory Mortgage on its part to be
performed or observed, the Mortgagee may in its discretion do any act or make
any expenditures necessary to remedy such default, and the Shipowner shall
promptly reimburse the Mortgagee, with interest at the Default Rate from time
to time in effect, for any and all expenditures so made or incurred and until
the Shipowner has so reimbursed the Mortgagee for such expenditures, the
amount thereof shall be a debt due from the Shipowner to the Mortgagee and
payment thereof shall be secured by the lien of this Deed and the Statutory
Mortgage in like manner and extent as if the amount and description thereof
were written herein, but the Mortgagee, although privileged to do so, shall
be under no obligation to the Shipowner to make any such expenditures and the
making thereof shall not relieve the Shipowner of any default in that or any
other respect. The Shipowner also shall reimburse the Mortgagee promptly with
interest at the rates referred to above for any and all advances and expenses
made or incurred by the Mortgagee at any time in taking the Vessel or
otherwise protecting its rights hereunder and for any and all damages
sustained by the Mortgagee from or by reason of any default or defaults of the
Shipowner.
Section 5.11 Delegation of Powers.
The Mortgagee may delegate to any person or persons all or any of
the trusts, powers or discretions vested in it pursuant to this Deed and the
Statutory Mortgage and any such delegations may be made upon such terms and
conditions and subject to such regulations (including power to sub-delegate)
as the Mortgagee may in its absolute discretion deem appropriate.
Section 5.12 Legal Actions.
In addition to the other provisions hereof for enforcement of the rights
of the Mortgagee under this Deed and the Statutory Mortgage, the Mortgagee
may, at its option, in the event of any default by the Shipowner, bring an
action, suit or other proceeding in rem against the Vessel to foreclose this
Deed and the Statutory Mortgage and sell the Vessel in any court in the
Bahamas or any other country in which the Vessel may be found; or an action,
suit or other proceeding in personam against the Shipowner or any other person
obligated under the Loan Agreements or any of the Security Documents to
recover payment of any amount owing by the Shipowner or such other person
and/or to foreclose this Deed and the Statutory Mortgage and sell the Vessel
in any country in which the Vessel or the Shipowner or any person so obligated
may be found.
Section 5.13 Deed and Statutory Mortgage Subject to Rights of
Charterer under the Charter.
So long as the Charter is in effect, the rights of the Mortgagee
set forth in this Article V are and shall be subject to the rights of the
Charterer under the Charter. So long as the Charterer shall not be in default
under and pursuant to the terms of the Charter, the Charterer shall be
entitled to quiet enjoyment of the Vessel.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.01 Performance by Charterer or Charterer Under an
Acceptable Replacement Charter.
(a) It is hereby agreed by the parties hereto that, for the
duration of the Charter, when the Charterer or any charterer under an
Acceptable Replacement Charter performs and discharges its obligations under
the Charter respecting the Vessel, such performance of the said obligations by
the Charterer shall be deemed to be proper and due performance of the same
obligations of the Shipowner under this Deed, the Statutory Mortgage, the
Assignment of Earnings and other Security Documents, notwithstanding that the
extent or manner of performance of the Shipowner's obligations may differ from
that of the Charterer under the Charter.
(b) So long as the Charter is in effect, to the extent the
Shipowner's approval under the Charter is not to be unreasonably withheld, the
approval by the Mortgagee under the corresponding provisions of this Deed also
shall not be unreasonably withheld.
(c) So long as the Charter is in effect, where any obligation
with respect to the Vessel is undertaken by the Shipowner under this Deed,
the Statutory Mortgage or any other of the Security Documents but such
obligation is not undertaken by the Charterer under the Charter, then the
Shipowner shall not be treated as in default under this Deed and the Statutory
Mortgage if such obligation cannot be performed by virtue of the Charter.
(d) So long as an Acceptable Replacement Charter is in effect,
the insurance coverage required under an Acceptable Replacement Charter or
maintained by the Shipowner or charterer in connection with any other charter
entered into after the termination of the related Initial Charter must be
sufficient to maintain the credit rating of the Term Mortgage Notes by the
Rating Agencies at least at the rating applicable to the Term Mortgage Notes
immediately prior to the effectiveness of such Acceptable Replacement Charter
or other charter.
Section 6.02 Discharge of Mortgage.
The Mortgagee agrees that upon payment of the Indebtedness it
shall at the expense of the Shipowner discharge this Deed and the Statutory
Mortgage and transfer or release to the Shipowner all insurance policies and
certificates of entry relating to the Vessel freed and discharged from the
provisions herein contained.
Section 6.03 Indemnity.
The Shipowner assumes liability for and agrees to indemnify the
Mortgagee and the Holders and their respective directors, officers, employees
and agents from and against any and all liabilities, losses, damages,
penalties, costs and expenses, including legal expenses, of whatsoever kind or
nature, imposed on or asserted against any of the Mortgagee and the Holders
and such directors, officers, employees and agents in any way relating to or
arising out of the Vessel or the use thereof at any time by any party (other
than by the Mortgagee after such time as the Mortgagee shall have taken
possession of the Vessel pursuant to Section 5.02), including, without
limitation, (i) latent and other defects whether or not discovered or
discoverable by the Shipowner or any other person, (ii) claims for patent,
trademark or copyright infringement, (iii) tort or damage claims of any kind,
(iv) claims or penalties arising from any violation of the laws of any country
or political subdivision thereof and (v) claims for environmental liability or
in any way relating to applicable environmental laws.
Section 6.04 Governing Law.
THIS DEED SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
COMMONWEALTH OF THE BAHAMAS AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
Section 6.05 Severability.
If any provision of this Deed and the Statutory Mortgage is held
to be in conflict with any applicable statute or rule of law or is otherwise
held to be unenforceable for any reason whatsoever, such circumstances shall
not have the effect of rendering the provision in question inoperative or
unenforceable in any other case or circumstance, or of rendering any other
provision or provisions herein contained invalid, inoperative, or
unenforceable to any extent whatsoever.
The invalidity of any one or more phrases, sentences, clauses or
Sections of this Deed or the Statutory Mortgage, shall not affect the
remaining portions of this Deed and the Statutory Mortgage, or any part
thereof.
Section 6.06 Notices.
All demands, notices and communications hereunder shall be in
writing, personally delivered or mailed by certified mail-return receipt
requested, and shall be deemed to have been duly given upon receipt (a) in the
case of the Mortgagee, at the following address: California Petroleum
Transport Corporation, c/o JH Management Corporation, Room 6/9, One
International Place, Boston, Massachusetts 02110-2624, (b) in the case of the
Shipowner, at the following address: Mareva House, 4 George Street, Nassau,
Bahamas, or at other such address as shall be designated by such party in a
written notice to the other parties.
Section 6.07 Headings.
The captions or headings in this Deed are for convenience only and
in no way define, limit or describe the scope or intent of any provisions or
sections of this Deed or the Statutory Mortgage.
Section 6.08 General Interpretive Principles.
For purposes of this Deed except as otherwise expressly provided
or unless the context otherwise requires:
(a) the defined terms in this Deed shall include the plural as
well as the singular, and the use of any gender herein shall be deemed to
include any other gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles as in effect on the date hereof;
(c) references herein to "Articles", "Sections", "Subsections",
"paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, paragraphs and other subdivisions
of this Deed;
(d) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to paragraphs and
other subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Deed and the Statutory Mortgage as a whole and
not to any particular provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
Section 6.09 Successors and Assigns.
This Deed and the Statutory Mortgage shall inure to the benefit of
and be binding upon the Shipowner and the Mortgagee and their respective
successors and assigns.
Section 6.10 Consent to Jurisdiction.
Any legal suit, action or proceeding against the Shipowner arising
out of or relating to this Deed, the Statutory Mortgage, the Loan Agreements
or any other Security Document, or any transaction contemplated hereby or
thereby, may be instituted in any federal or state court in The City of New
York, State of New York and the Shipowner hereby waives any objection which it
may now or hereafter have to the laying of venue of any such suit, action or
proceeding, and the Shipowner hereby irrevocably submits to the jurisdiction
of any such court in any such suit, action or proceeding. The Shipowner
hereby irrevocably appoints and designates CT Corporation System, having an
address at 1633 Broadway, New York, New York, its true and lawful
attorney-in-fact and duly authorized agent for the limited purpose of accepting
service of legal process and the Shipowner agrees that service of process upon
such party shall constitute personal service of such process on the Shipowner.
The Shipowner shall maintain the designation and appointment of such
authorized agent until all amounts payable under this Deed, the Statutory
Mortgage, the Loan Agreements and the other Security Documents shall have been
paid in full. If such agent shall cease to so act, the Shipowner shall
immediately designate and appoint another such agent satisfactory to the
Mortgagee and shall promptly deliver to the Mortgagee evidence in writing of
such other agent's acceptance of such appointment.
Section 6.11 Payment.
All monies payable by the Shipowner to the Mortgagee shall be paid
in Dollars without deduction for or on account of any present or future taxes
or imposts whatsoever levied or assessed by or within any state or nation or
any political subdivision or taxing authority thereof or therein and the
Shipowner shall indemnify the Mortgagee against all such taxes or imposts.
The Shipowner shall, subject to the prior written approval of the Mortgagee
(such approval not to be unreasonably withheld), be entitled to take action in
the name of the Mortgagee at the Shipowner's expense against any taxing
authority in respect of any withholding or other taxes for which the Shipowner
have indemnified the Mortgagee, and the Mortgagee agrees to reasonably
cooperate with the Shipowner in taking such action. If as a result of any
such action any moneys are received that are attributable to such indemnified
taxes (including any interest thereon paid by such taxing authority) the same
shall be recovered by the Shipowner.
Section 6.12 Recorded Amount.
For the purposes of the recording this First Priority Statutory
Mortgage under the law of the Bahamas, the total amount of this Deed and the
Statutory Mortgage is Two Hundred and Eighty-Six Million Four Hundred Thousand
United States Dollars (US$286,400,000), and interest and the performance of
the Deed and Statutory Mortgage covenants; the maturity date is the ___ day of
_____, 2014, and the discharge amount is the same as the total amount. It is
not intended that this Deed and the Statutory Mortgage shall include property
other than the Vessel, and it shall not include property other than the Vessel
as the term "vessel" is used in the provisions of the law of the Bahamas.
Notwithstanding the foregoing, for property other than the Vessel, if any
should be determined to be covered by this Deed and the Statutory Mortgage,
the discharge amount is zero point zero one percent (0.01%) of the total
amount.
Section 6.13 No waiver of Preferred Status.
No provision of this Deed and the Statutory Mortgage shall be
deemed to be a stipulation that the Mortgagee waives the priority status of
the Statutory Mortgage given by the laws of the Bahamas. Any provision of
this Mortgage which would otherwise constitute such a stipulation, to such
extent, shall have no force or effect.
IN WITNESS whereof the Shipowner has signed this Deed on the day and
year first before written.
CALPETRO TANKERS (BAHAMAS I)
LIMITED
By:
Name:
Title:
ACKNOWLEDGEMENT
STATE OF NEW YORK )
:ss.:
COUNTY OF NEW YORK )
On this day of _________ __ 1994_, before me personally came
__________________ to me known, and known to me to be the person who executed
the foregoing instrument, who being by me duly sworn, did depose and say that
he resides at ______________________________________ that he is the
attorney-in-fact for CalPetro Tankers (Bahamas I) Limited the corporation
described in, and which executed the foregoing instrument; that it was so
affixed by order of the Board of Directors of said corporation and that he
signed his name thereto by like order.
EXHIBIT A
BROKER'S LETTER OF UNDERTAKING
(date)
_____________________
Re: CalPetro Tankers (Bahamas III) Limited
Owner of m.t. Condoleezza Rice (the "Vessel")
We confirm that we have effected insurances for the account of the
above Owner as set out in Appendix "A" attached hereto.
Pursuant to instructions received from CalPetro Tankers (Bahamas
III) Limited (the "Owner"), and in consideration of your approving our
appointment as Brokers in connection with the insurances covered by this
letter, we hereby undertake:
1. to hold the Insurance Slips or Contracts, the Policies when
issued, and any renewals of such Policies or new Policies or
any Policies substituted (with your consent) therefor and
the benefit of the insurance thereunder to your order in
accordance with the terms of the Notice of Assignment and
Loss Payable Clause set out in Appendix "B" attached hereto;
and
2. to have endorsed on each and every Policy as and when the
same is issued a copy of the Notice of Assignment and Loss
Payable Clause in the form of Appendix "B" attached hereto
dated and signed by the Shipowner and acknowledged by
Underwriters in accordance with market practice; and
3. to advise you immediately of any material changes which may
be made to the terms of the insurances or if we cease to be
Brokers for purposes of said insurances; and
4. to advise you, not later than one month before expiry of
said insurances, in the event of our not having received
notice of renewal instructions from the Shipowner and/or its
agents, and in the event of our receiving instructions to
renew said insurances to advise you promptly of the details
thereof.
Our above undertakings are given subject to our lien on the
Policies for premiums for the Vessel and subject to our right of cancellation
on default in payment of such premiums. We undertake to advise you
immediately if any premiums are not paid to us by the applicable due date and
not to exercise such rights of cancellation without giving you (i) fourteen
(14) days' prior notice in writing, either by letter to the above address or
by telex or cable to ________________, respectively, and (ii) a reasonable
opportunity of paying any premiums outstanding except it is understood that in
the case of War Risks the terms of the Automatic Termination of Cover Clause
contained in the War Risks Policies shall override any undertakings given by
us as Brokers. We further undertake and agree that in the event of a total
loss of the Vessel, or an arranged, compromised or constructive total loss,
our lien on the Policies and the proceeds thereof shall be limited to any
other premiums or other amounts due in respect of Vessel or interest insured
under the Policies.
Notwithstanding the terms of the said Loss Payable clause and the
said Notice of Assignment, unless and until we receive notice from you to the
contrary, we shall be empowered to arrange for a collision and/or salvage
guaranty to be given in the event of bail being required in order to prevent
the arrest of the Vessel or to secure the release of the Vessel from arrest
following a casualty. We undertake to advise you immediately in the event of
our having arranged for a collision and/or salvage guaranty. Where a guaranty
has been given as aforesaid and the guarantor has paid an amount under the
guaranty in respect of such claim, there shall be payable directly to the
guarantor out of the proceeds of the said Policies an amount equal to the
amount so paid.
Finally, it is understood that all claims shall be collected
through us, as Brokers, and that in collecting such claims we are acting on
your behalf as assignee of the insurances covered by this letter.
Yours faithfully,
[insert name of Broker]
By:
Director
SCHEDULE 1
Defined Terms Used in the Deed
"Acceptable Replacement Charter" means any replacement charter which
satisfies each of the following requirements: (i) the charter is a bareboat
charter and requires that the charterer thereunder "gross up" charterhire
payments to indemnify and hold the Holders of the Securities harmless from any
withholding tax imposed on the charterhire payments or on the payments on the
Securities; (ii) the charterhire payments payable during the non-cancelable
term of such replacement charter, after giving effect to (1) any "gross up" of
such amounts as a result of any withholding tax on such charterhire payments,
(2) the receipt of the Termination Payment and (3) all fees and expenses
incurred in connection with the rechartering of the Vessel, provide sufficient
funds for the payment in full when due of (A) the Allocated Principal Amount
of the Term Mortgage Notes for the related Vessel and interest thereon in
accordance with the revised schedule of sinking fund and principal payments,
that is applicable upon termination of the related Initial Charter, (B) the
amount of Recurring Fees and Taxes for such Vessel, (C) the amount of
Management Fees and Technical Advisor's Fees for such Vessel, (D) the amount of
fees and expenses of the Indenture Trustee and Collateral Trustee allocable to
such Vessel and (E) an amount at least equal to 30% of the estimated amounts,
on a per annum basis, referred to in clauses (B), (C) and (D) above for
miscellaneous or unexpected expenses; and (iii) the Rating Agencies shall have
confirmed in writing to the Trustee that the terms and conditions of such
proposed charter will not result in the withdrawal or reduction of the then
current ratings of the Term Mortgage Notes.
"Allowable Investments" means for the Shipowner, its investment in the
Vessel and any Restricted Payment permitted to be made by the Shipowner and
certain obligations incurred in the ordinary course of the performance of the
Management Agreement.
"Assignment of Charter" means the assignment between the Shipowner and
the Mortgagee, as amended from time to time in accordance with the terms
thereof, together with the documents contemplated thereby, pursuant to which
the Shipowner assigns to the Mortgagee all of its right, title and interest
in, to and under the Initial Charter.
"Assignment of Earnings and Insurances" means the assignment between the
Shipowner and the Mortgagee, as amended from time to time in accordance with
the terms thereof, pursuant to which the Shipowner assigns to the Mortgagee
all of its right, title and interest in, to and under the freights and hires
(as well as any charters entered into after the Closing Date) with respect to
the Vessel.
"Assignment of Guarantee" means the assignment between the Shipowner and
the Mortgagee, as amended from time to time in accordance with the terms
thereof, pursuant to which the Shipowner assigns to the Mortgagee all of its
right, title and interest in, to and under the Chevron Guarantee.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in New York, New York, or in the city and state
where the Trustee's principal offices are located, are authorized or are
obligated by law, executive order or governmental decree to be closed.
"Charter" means that certain Bareboat Charter, dated as of July 1, 1994,
between the Charterer and Shipowner.
"Charterer" means Chevron Transport Corporation.
"Classification society" means a private organization which has as its
purpose the supervision of vessels during their construction and afterward, in
respect to their seaworthiness and upkeep, and the placing of vessels in
grades or "classes" according to the society's rules for each particular type
of vessel.
"Closing Date" means July __, 1994.
"Code" means the United States Internal Revenue Code of 1986 and the
corresponding provisions of any successor statute.
"Collateral Trustee" means Chemical Trust Company of California.
"Compulsory Acquisition" means requisition for title or other compulsory
acquisition of the Vessel (otherwise than by requisition for hire), capture,
seizure, detention or confiscation of the Vessel by any other government or by
Persons acting or purporting to act on behalf of any government or
governmental authority.
"Default Period" means the period commencing the date any payment
hereunder was due to but not including the date such payment is paid in full.
"Default Rate" means a rate per annum for each day during the Default
Period until such payment shall be paid in full equal to 1.50% above LIBOR at
the commencement of such period.
"Dollar" or "$" means the lawful currency of the United States of
America.
"Earnings" includes all monies whatsoever due or to become due to the
Shipowner at any time arising out of the use or operation of the Vessel or
otherwise including (but without prejudice to the generality of the foregoing)
all sums due and payable to the Shipowner under and pursuant to the Charter
and all freight, hire and passage monies and compensation payable to the
Shipowner in the event of requisition of the Vessel for hire, remuneration for
salvage and towage, services, demurrage and detention moneys and any other
damages for breach (or payments for variation or termination) of any
charterparty or any contract of employment of the Vessel and all earnings of
the Vessel due or to become due to the Shipowner.
"Event of Default" means an Event of Default under Section ____ of the
Loan Agreement.
"Governmental Approval" means any authorization, consent, approval,
license, franchise, lease, ruling, permit, tariff, rate, certification,
exemption, filing or registration by or with any Governmental Authority
relating to the ownership of the Collateral or to the execution, delivery or
performance of the Loan Agreement or any Security Document.
"Governmental Authority" means the federal government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any other governmental entity with authority over the
Shipowner or operation of the Vessels.
"Indebtedness" means the payment, performance or other obligations of
any kind whatsoever of the Shipowner under and pursuant to the Loan Agreements
and the Security Documents, together with interest thereon, and all other sums
which may be or become due to the Deed and the Statutory Mortgagee under or
pursuant to the terms thereof and hereof.
"Insurance" means any policies and contracts of insurance and entries in
any protection and indemnity or war risks association which are effected by or
on behalf of the Shipowner in respect of the Vessel or otherwise in connection
with the Vessel, including but not limited to any insurance monies received by
the Shipowner pursuant to clauses 12 and 13 of the Charter and including all
claims and returns of premiums thereunder and including any compensation
payable by whomsoever to the Shipowner by virtue of requisition of the Vessel
for title or confiscation or seizure of the Vessel by any government or person
or agency purporting to act on behalf of any government.
"Issue of One Debenture" means each Issue of One Debenture between the
Shipowner and the Mortgagee, as amended from time to time in accordance with
the terms thereof, pursuant to which the Shipowner grants to the Mortgagee a
security interest in all of its assets.
"Law" means any statute, law, rule, regulation, ordinance, order, code,
policy or rule of common law, now or hereafter in effect, and any judicial or
administrative interpretation thereof by a Governmental Authority or
otherwise, including any judicial or administrative order, consent decree or
judgment.
"Lien" means any mortgage, lien (statutory or other), pledge, security
interest, encumbrance, claim, hypothecation, assignment for security, deposit
arrangement or preference or other security agreement of any kind or nature
whatsoever. For purposes of the Loan Agreement, a Person shall be deemed to
own subject to a Lien any property which it has acquired or holds subject to
the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement.
"Loan Agreements" means, collectively, the Serial Loan Agreement and the
Term Loan Agreement.
"Management Agreement" means the management agreement between the
Shipowner, the Manager and Barber Ship Management Group.
"Manager" means the Person performing the duties of the Manager under the
Management Agreement, initially P.D. Gram & Co. ans.
"Obligations" means, collectively, the Serial Obligations and the Term
Obligations.
"Optional Termination Date" means either _________, 2005, ______ 2007 or
_____ 2009.
"Other Loan Agreements" means, collectively, the six loan agreements,
two each between the Mortgagee and each of the Other Owners relating to the
Other Loans.
"Other Loans" means each of the loans from California Petroleum
Transport Corporation to each of the Other Owners made on the Closing Date,
having an aggregate initial principal amount of $______________..
"Other Owners" means Calpetro Tankers (Bahamas I) Limited, Calpetro
Tankers (Bahamas II) Limited and Calpetro Tankers (IOM) Limited.
"Payment Date" means each ________ and ______________ commencing
___________ 1994.
"Permitted Liens" means the Charter, liens for crew's wages accrued for
not more than three months or for collision or salvage, liens in favor of
suppliers of necessaries or other similar liens arising in the ordinary course
of its business (accrued for not more than three months) or liens for loss,
damage or expense, which are fully covered by insurance or, in respect of
which, a bond or other security has been posted by the Shipowner with the
appropriate court or other tribunal to prevent the arrest or secure the
release of the Vessel from arrest on account of such claim or lien; provided,
however, that so long as the Charter is in effect "Permitted Liens" shall mean
those liens, claims and encumbrances permitted under the Charter.
"Person" means an individual, a partnership, a corporation, a joint
venture, an unincorporated association, a joint-stock company, a trust, or
other entity or a government or any agency or political subdivision thereof.
"Proceeding" means any suit in equity, action at law, or other judicial
or administrative proceeding.
"Purchase Agreement" means the Purchase Agreement, dated as of
_________________, between the Shipowner and the Initial Charterer wherein the
Shipowner purchases the Vessel from the Initial Charterer.
"Rating Agencies" means Moody's Investors Service, Inc., Standard &
Poor's Rating Group and Duff & Phelps Credit Rating Co.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or partnership agreement or other organizational or
governing documents of such Person, and, any Law applicable to or binding upon
such Person or any of its properties or to which such Person or any of its
properties is subject.
"Security Documents" means the Loan Agreements, the Other Loan
Agreements, the Deed, the Statutory Mortgage, the Assignment of Charter, the
Assignment of Earnings and Insurances, the Assignment of Guarantee, the Stock
Pledge Agreement, the Assignment of Management Agreement, the Assignment of
Purchase Agreement, the Issue of One Debenture, collectively.
"Serial Loan" means the loan in the initial principal amount of
$________ made by the Mortgagee to the Shipowner under the Serial Loan
Agreement.
"Serial Loan Agreement" means the Loan Agreement, dated as of _________
1, 1994, between the Shipowner and the Mortgagee.
"Serial Obligations" means the payment, performance or obligations of
any kind or nature whatsoever by the Shipowner under and pursuant to the
Serial Loan Agreements, any Security Document and any instrument, agreement or
document referred to therein.
"State" means any state of the United States of America and, in
addition, the District of Columbia.
"Stock Pledge Agreement" means the Stock Pledge Agreement, dated as of
_____________, 1 1994, between the Mortgagee and California Tankers
Investments Limited.
"Term Loan" means the loan in the initial principal amount of $_________
made by the Mortgagee to the Shipowner under the Term Loan Agreement.
"Term Loan Agreement" means the Loan Agreement, dated as of _________ 1,
1994, between the Shipowner and the Mortgagee.
"Term Obligations" means the payment, performance or obligations of any
kind or nature whatsoever of the Shipowner under and pursuant to the Term Loan
Agreements, any Security Document and any instrument, agreement or document
referred to therein.
"Total Loss" means either (a) actual or constructive or compromised or
arranged total loss of the Vessel, (b) Compulsory Acquisition of the Vessel or
(c) if so declared by the Initial Charterer at any time and in its sole
discretion a requisition for hire of the Vessel for a period in excess of 180
days.
"Trustee" means Chemical Trust Company of California.
ASSIGNMENT OF A FIRST PREFERRED SHIP MORTGAGE
THIS ASSIGNMENT OF THE FIRST PREFERRED SHIP MORTGAGE ("this Assignment")
is made the ___ day of _____________, 1994 by California Petroleum Transport
Corporation, a corporation organized under the laws of the State of Delaware
(herein called the "Assignor"), in favor of Chemical Trust Company of
California, a corporation organized under the laws of the State of California
(herein called the "Assignee").
W I T N E S S E T H T H A T:
WHEREAS:
(A) CalPetro Tankers (Bahamas III) Limited (herein called the
"Owner"), a corporation incorporated under the laws of the Commonwealth of The
Bahamas with its registered office at Mareva House, 4 George Street, Nassau,
Bahamas, has granted and executed a certain First Preferred Ship Mortgage
dated ____ __, 1994 (the "Mortgage") in favor of the Assignor in the amount
of U.S. $286,400,000 and interest and performance of mortgage covenants (the
"Outstanding Indebtedness") on the vessel m.t. William E. Crain, documented
under the laws of the Republic of Liberia, Official No. _______ (the
"Vessel"), the Mortgage having been recorded on _____________, 199__ at E.D.T.
in the Office of the Deputy Commissioner of Maritime Affairs of the Republic
of Liberia at New York, New York, in Book PM ____ at Page _____ to secure the
payment by the Owner to the Assignor of the Outstanding Indebtedness;
(B) The Assignor has agreed to execute and deliver to the Assignee
this Assignment, as security for the prompt and due payment to the Assignee of
certain securities issued by the Assignor, pursuant to two indentures attached
hereto as Exhibits A and B (the "Serial Indenture" and the "Term Indenture",
and collectively, the "Indentures"). Pursuant to the Serial Indenture dated
as of ____ 1, 1994, between the Assignor and the Assignee, the Assignor issued
the Serial First Preferred Mortgage Notes (the "Serial Notes") in the initial
amount of $168,500,000 and pursuant to the Term Indenture dated as of ____ 1,
1994, between the Assignor and the Assignee, the Assignor issued the Term
First Preferred Mortgage Notes in the initial amount of $117,900,000 (the
Serial Notes and the Term Notes, collectively, the "Securities"). This
Assignment is security for the due and prompt payment of the Securities and
any and all other sums which may be or become due to the Assignee and/or the
holders of the Securities under or pursuant to the Serial Indenture and the
Term Indenture, equally and ratably, and this Assignment and also to secure
the exact performance and observance and compliance with all and any of the
covenants and agreements and terms and conditions contained in the Serial
Indenture and the Term Indenture, equally and ratably, and this Assignment and
the other Security Documents (collectively, the "Indebtedness").
NOW, THEREFORE, in consideration of the premises and such other
consideration, the receipt and sufficiency of which is hereby acknowledged by
the Assignor:
1. Capitalized terms used in this Assignment and not otherwise
defined herein shall have the meanings assigned to such terms in
the Indentures, attached as Exhibits A and B hereto, and the
definitions of such terms shall be equally applicable to both the
singular and the plural forms of such terms.
2. The Assignor does hereby sell, assign, transfer and set over unto
the Assignee for the benefit of the assignee and its successors
and assigns, in consequence of the Assignment, all of the
assignor's right, title and interest in, to and under the Mortgage
and all of the assignor's right, title and interest in and to the
Vessel together with all of the boilers, engines, machinery,
masts, rigging, boats, anchors, chains, tackle, apparel,
furniture, fittings and equipment and all other appurtenances
thereto appertaining or belonging to the exclusive use of the
Vessel, whether now owned or hereafter acquired, whether on board
or not, all additions, improvements and replacements hereafter
made in or to the Vessel.
IN WITNESS WHEREOF, the Assignor has caused this Assignment to be
executed on the day and year first above written.
CALIFORNIA PETROLEUM
TRANSPORT CORPORATION
By: _______________
Name: _______________
Title:_______________
State of New York )
: ss.:
County of New York )
On the (date) day of (month), 1994, before me personally came
(attorney), to me known, who being by me duly sworn did depose and say that
he resides at (address); that he is an attorney-in-fact of California
Petroleum Transport Corporation, the corporation described in and which
executed the foregoing Assignment of Mortgage; and that he signed his name
thereto by order of the Board of Directors of said corporation.
__________________________
Notary Public
DEED OF COVENANTS
TO ACCOMPANY FIRST PRIORITY
STATUTORY MORTGAGE OF A SHIP
by
CALPETRO TANKERS (IOM) LIMITED
Shipowner
to
CALIFORNIA PETROLEUM TRANSPORT CORPORATION
Mortgagee
Dated _________ __, 1994
m/t ____________
Deed of Covenants, dated _________ __, 1994 (as amended or
supplemented from time to time, the "Deed"), from CalPetro Tankers (IOM)
Limited, a company incorporated with limited liability in the Isle of Man
whose registered office is at United House, 14-16 Nelson Street, Douglas, Isle
of Man, British Isles (hereinafter called "the Shipowner") to California
Petroleum Transport Corporation (the "Mortgagee").
WHEREAS, the Shipowner is the absolute and unencumbered owner of
the whole of the motor tanker "_____________" (the "Vessel") duly registered
in the name of the Shipowner under the laws and flag of Bermuda on ___________
__, 199_, built in 199_, having the following approximate dimensions and
tonnages: length ___ meters, breadth ____ meters, depth __ meters, gross
tonnage _______, net tonnage ________, and more particularly described in the
Certificate of Registration with Official Number _____ and with International
Code Signal ______ and home port of Hamilton, Bermuda;
WHEREAS, contemporaneously with the execution of this Deed there
has been executed and registered by the Shipowner in favor of the Mortgagee a
First Priority Statutory Bermudian Mortgage (to secure an account current)
(the "Statutory Mortgage") constituting a first priority statutory mortgage of
the whole of the Vessel and the Shipowner has agreed to execute this Deed
collateral thereto and to the security thereby created;
WHEREAS, in order to secure the prompt and due payment to the
Mortgagee of the Indebtedness (as defined herein) and any and all other sums
which may be or become due to the Mortgagee under or pursuant to the Loan
Agreements, this Deed, the Statutory Mortgage and any other Security Document
and also to secure the exact performance and observance and compliance with
all and any of the covenants and agreements and terms and conditions contained
in the Loan Agreements, this Deed, the Statutory Mortgage and in the other
Security Documents, the Shipowner has duly authorized the execution and
delivery of this Deed and the Statutory Mortgage in favor of the Mortgagee
under and pursuant to the laws of Bermuda.
NOW, THEREFORE, in consideration of the premises and of the
covenants herein contained, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
Capitalized terms used in this Deed and the Statutory Mortgage and
not otherwise defined herein shall have the meanings assigned to such terms in
either Schedule 1 to this Deed or the Loan Agreements, and the definitions of
such terms shall be equally applicable to both the singular and the plural
forms of such terms.
ARTICLE II
SECURITY
Section 2.01 Security.
In order to secure the payment of the Indebtedness and the
repayment of any costs of foreclosure or of retaking the Vessel, and the
payment of all such other amounts as may hereafter become secured by this Deed
and Statutory Mortgage in accordance with the terms hereof and thereof, and to
secure the performance and observance of and compliance with the covenants,
terms and conditions contained in this Deed, the Statutory Mortgage, the Loan
Agreements, and the other Security Documents to which the Shipowner is a
party, the Shipowner has granted, conveyed, pledged and mortgaged to and in
favor of the Mortgagee, its successors and assigns the whole of the Vessel,
together with all of the boilers, engines, machinery, masts, spars, rigging,
boats, cables, anchors, chains, tackle, apparel, furniture, fittings, freights
and equipment thereunto appertaining or belonging, whether now owned or
hereafter acquired, whether on board or not, and all additions, improvements
and replacements hereafter made in or to the Vessel (the term "Vessel", as
used herein, shall include the Vessel together with all of the foregoing and
the Vessel's freights) forever upon the terms set forth in this Deed and the
Statutory Mortgage for the enforcement of the payment of the Indebtedness, the
payment of any costs of foreclosure or retaking of the Vessel and all such
other amounts as may hereafter become secured by this Deed and the Statutory
Mortgage in accordance with the terms hereof and thereof and to secure the
performance and observance of and compliance with the covenants, terms and
conditions contained in this Deed, the Statutory Mortgage and the Security
Documents, it being agreed that if any amount payable by the Shipowner under
either Loan Agreement is not paid on its due date (whether formally demanded
or not) the whole or the balance of the Indebtedness and all other amounts
payable under the Security Documents shall forthwith on demand become payable;
provided, however, and the conditions of these presents are such that, if the
Shipowner shall pay or cause to be paid to the Mortgagee all of the
Indebtedness as set forth in the Security Documents, and if the Shipowner
shall pay all such other amounts as may hereafter become secured by this
Mortgage and all expenses which the Mortgagee shall have paid or incurred to
protect the security granted hereunder, and if the Shipowner shall perform,
observe and comply with all and singular of the covenants, terms and
conditions in this Deed, the Statutory Mortgage, the Loan Agreements and the
other Security Documents contained, expressed or implied, to be performed,
observed or complied with by and on the part of the Shipowner or its
successors or assigns, all without delay or fraud and according to the true
intent and meaning hereof and therefor, then these presents and the rights of
the Mortgagee under this Mortgage and the other Security Documents shall cease
and, in such event, the Mortgagee agrees by accepting this Deed and the
Statutory Mortgage to execute, at the expense of the Shipowner, all such
documents as the Shipowner may reasonably require to discharge this Deed and
the Statutory Mortgage under the laws of Bermuda; otherwise this Deed and the
Statutory Mortgage shall remain in full force and effect; provided further,
however, the conditions of these presents are such that, if the Shipowner
shall satisfy or cause to be satisfied and pay or cause to be paid to the
Mortgagee all of the Serial Obligations, then these presents and the rights of
the Mortgagee under this Deed and the Statutory Mortgage and the other
Security Documents with respect to the Serial Loan Agreement shall cease and,
in such event, this Deed and the Statutory Mortgage shall secure all of the
Indebtedness other than the Serial Obligations.
Section 2.02 Indebtedness.
(a) The Shipowner acknowledges that pursuant to the Loan
Agreements it is jointly and severally liable with the Other Owners to the
Mortgagee in the original principal amount of Two Hundred Eighty-Six Million
Four Hundred Thousand United States Dollars (US$286,400,000). The Shipowner
shall repay the Obligations in accordance with terms and conditions of the
Loan Agreements with the last installment due and payable on _________, 2014.
The Shipowner further agrees to pay all other sums comprising the Indebtedness
in accordance with the terms, conditions and provisions in the Loan Agreements
and in this Deed and the Statutory Mortgage and to perform, observe and comply
with the covenants, terms and obligations and conditions on its part to be
performed, observed and complied with contained or implied herein and in the
Loan Agreements and in the other Security Documents.
(b) The Shipowner shall also pay to the Mortgagee upon the
Mortgagee's first written demand all stamp duties, registration and/or
recording fees, charges for certificates, valuation fees, costs and expenses
(including, the fees and expenses of its attorneys) of any nature whatsoever
incurred by the Mortgagee in connection with the preparation, completion,
execution and registration of this Deed and the Statutory Mortgage and all
other claims, expenses, costs, payments, disbursements, losses, damages or
liabilities which may be incurred by the Mortgagee by reason of the covenants
and conditions contained herein, in the Loan Agreements or in the other
Security Documents, together with interest thereon as herein or therein
provided, and confirms that such obligations are secured by this Deed and the
Statutory Mortgage.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations and Warranties of the Shipowner.
The Shipowner hereby represents and warrants to the Mortgagee as
follows:
(a) The Shipowner (i) is a company duly formed, validly existing
and in good standing under the laws of the Isle of Man and (ii) is duly
authorized, to the extent necessary, to do business in each jurisdiction where
the character of its properties or the nature of its activities makes such
qualification necessary. The Shipowner has not engaged in any business or
activity other than as set forth in Section 5.04 of the Loan Agreements. The
Shipowner has all requisite corporate power and authority to own and operate
the property it purports to own and to carry on its business as now being
conducted and as proposed to be conducted in respect of the Vessel.
(b) The Shipowner has all necessary corporate power and authority
to execute, deliver and perform under this Deed and the Statutory Mortgage,
the Loan Agreements and each other Security Document to which it is a party.
(c) All action on the part of the Shipowner that is required for
the authorization, execution, delivery and performance of this Deed and the
Statutory Mortgage, the Loan Agreements and each other Security Document to
which it is a party, in each case has been duly and effectively taken; and the
execution, delivery and performance of this Deed, the Statutory Mortgage, the
Loan Agreements and each such other Security Document do not require the
approval or consent of any Person except for such consents and approvals as
have been obtained on or prior to the date hereof.
(d) This Deed, the Statutory Mortgage, the Loan Agreements and
each other Security Document to which the Shipowner is a party have been duly
executed and delivered by the Shipowner. Each of this Deed, the Statutory
Mortgage, the Loan Agreements and each other Security Document to which the
Shipowner is a party constitute a legal, valid and binding obligation of the
Shipowner, enforceable against it in accordance with the terms thereof, except
as such enforceability (i) may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting the
enforcement of creditors' rights and remedies generally and (ii) is subject to
general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).
(e) Neither the execution, delivery and performance of this Deed,
the Statutory Mortgage, the Loan Agreements or any other Security Document to
which the Shipowner is a party nor the consummation of any of the transactions
contemplated hereby or thereby nor performance of or compliance with the terms
and conditions hereof or thereof (i) contravenes any Requirement of Law
applicable to the Shipowner or to the Vessel, (ii) constitutes a default under
any Security Document or (iii) results in the creation or imposition of any
Liens on the Vessel (other than Permitted Liens) or results in the
acceleration of any obligation.
(f) The Shipowner is in compliance with and not in default under
any and all Requirements of Law applicable to the Shipowner and all terms and
provisions of this Deed, the Statutory Mortgage, the Loan Agreements and all
Security Documents.
(g) All Governmental Approvals which are required to be obtained
in the name of the Shipowner in connection with the operation and maintenance
of the Vessel and the execution, delivery and performance by the Shipowner of
this Deed and the Statutory Mortgage have been obtained and are in effect as
of the date hereof.
(h) There are no actions, suits or proceedings at law or in
equity or by or before any Governmental Authority now pending against the
Shipowner or the Vessel or, to the best of the Shipowner's knowledge,
threatened against the Shipowner or the Vessel or pending or threatened
against any property or other assets or rights of the Shipowner with respect
to the Vessel, this Deed, the Statutory Mortgage or any other Security
Document.
(i) The Shipowner is the sole and lawful owner of the whole of
the Vessel, free from all liens, security interests, mortgages, charges or
encumbrances (other than this Deed, the Statutory Mortgage and Permitted
Liens). The Shipowner shall defend for the benefit of the Mortgagee the title
and possession of the mortgaged property and every part thereof against the
claims and demands of all Persons.
(j) The Shipowner is, by this Deed and the Statutory Mortgage and
the recordation thereof, constituting in favor of the Mortgagee, among other
things, all the rights of a First Priority Statutory Mortgage of the Vessel to
secure the due and punctual payment of all amounts due and to become due to
the Mortgagee pursuant to the terms and conditions of this Deed, the Statutory
Mortgage, the Loan Agreements, the other Security Documents and the documents
contemplated hereby and thereby and the payment of all commissions and fees,
costs, charges, expenses, expenditures and interest owing to the Mortgagee
hereunder and thereunder, and the performance and observance of and compliance
with all the covenants, terms, conditions and provisions of this Deed, the
Statutory Mortgage, the Loan Agreements, the other Security Documents and the
documents contemplated hereby and thereby.
(k) No tax deficiencies and no past due obligations exist that
materially affect the operations of the Shipowner, except those contested in
good faith by appropriate proceedings for which adequate reserves with respect
to such claims so contested have been set aside on the books of the Shipowner.
(l) The Shipowner is not liable for any material amount of sales,
use or other similar tax in connection with the transactions described in this
Deed, the Statutory Mortgage, the Loan Agreements and the other Security
Documents.
ARTICLE IV
COVENANTS
So long as any of the Indebtedness is outstanding or any of its
obligations hereunder or under either Loan Agreement remain outstanding, the
Shipowner covenants and agrees, subject to Section 6.01, with the Mortgagee as
follows:
Section 4.01 Payment of Indebtedness.
The Shipowner shall repay to the Mortgagee the Indebtedness and at
all times shall keep, perform and observe the covenants, conditions and
agreements in this Deed, the Statutory Mortgage and the other Security
Documents contained, expressed or implied on its part to be kept performed and
observed for so long as any part of the Indebtedness remains outstanding.
Section 4.02 Corporate Existence.
The Shipowner is and shall remain a corporation qualified under
the laws of the Isle of Man.
Section 4.03 Insurance.
(a) The Shipowner, at its expense (including payment of all
premiums, costs and club calls, if any) shall effect or cause to be effected
the following insurances and keep the following in full force and effect:
(i) hull and machinery insurance equal to the greater of (i) the
Vessel's full commercial value and (ii) one hundred and fifteen percent
(115%) of the aggregate outstanding principal balance of the Term Loan
and the Serial Loan. Such Hull and Machinery insurance shall include
the "Institute Pollution Hazard Clause" and the "Institute Liner
Negligence and Additional Perils Clause". If the Vessel is laid up in
port for an extended period, then, with the prior written consent of the
Mortgagee, the Shipowner may obtain in lieu of the hull and machinery
insurance referred to in this Section 4.03(a)(i) port risk insurance
equal to the greater of (A) the Vessel's full commercial value or (B)
one hundred and fifteen per cent (115%) of the aggregate outstanding
principal balance of the Term Loan and Serial Loan. Such Port Risk
insurance shall be effected on Institute of London Underwriters
"Institute Port Risk Clauses" or American Institute "Port Risk
Endorsement";
(ii) war risk hull and machinery insurance (including risks of
mines) equal to the greater of (A) the Vessel's full commercial value or
(B) one hundred and fifteen percent (115%) of the aggregate outstanding
principal balance of the Term Loan and Serial Loan. Such war risk
insurance shall be effected with a War Risks Association approved by the
Mortgagee or on the full Institute of London Underwriters "Institute War
and Strikes Clauses" or American Institute "Hull War Risks and Strikes
Clauses";
(iii) mortgagee additional perils (oil pollution) insurance in an
amount equal to the aggregate outstanding principal amount of the Term
Loan and the Serial Loan related to the Vessel;
(iv) confiscation and requisition insurance to the extent and in
the circumstances that a prudent shipowner would obtain and maintain
such insurances;
(v) protection and indemnity insurance in the name of the
Shipowner, which shall include freight, demurrage and defense coverage
in an unlimited amount and coverage in respect of pollution risks for a
minimum of five hundred million dollars ($500,000,000) plus an
additional two hundred million dollars ($200,000,000) or such other
amount as may be then customary for prudent shipowners to maintain,
including coverage against liabilities to persons who have suffered any
loss, damage or injury whatsoever in connection with anything done or
not done by the Vessel, any charterer or the Shipowner in connection
with the Vessel or the employment or use thereof (including in
connection with any oil or other substance emanating from the Vessel or
any other vessel with which the Vessel may be involved in collision) and
against liability under the United States Oil Pollution Act of 1990
("OPA") or any re-enactment or modification thereof under the law of any
country into whose jurisdiction the Vessel is permitted to come under
the terms of the related charter;
(vi) such additional insurance as the Shipowner may deem
necessary; provided, however, that all such additional insurance,
including without limitation "disbursements," "increased value" or other
"total loss only" insurance shall not be in amounts in excess of those
permitted by the hull and machinery or war risk polices. Such hull and
machinery insurance shall be effected on Institute of London
Underwriters "Institute Time Clause - (Hulls)" or American Institute
"Time (Hulls) Clauses" including four-fourths (4/4ths) Running Down
Clause, except that three-fourths (3/4ths) Running Down Clause is
allowed provided the remaining one-fourth (1/4th) Running Down Clause is
fully covered by protection and indemnity insurance.
(vii) risks which are likely to arise due to the particular usage
and trading of the Vessel including all risks customarily and usually
covered by prudent shipowners; and
(viii)risks for which Bermuda may from time to time require
insurance or for which the Mortgagee may from time to time (after
receiving advice from its insurance advisers that a prudent shipowner
would obtain and maintain a type and amount of insurance for such risks)
require insurance.
Provided, however, that if the Vessel is subject to the Initial Charter
or an Acceptable Replacement Charter, the insurance requirements related to
the Initial Charter or Acceptable Replacement Charter will supersede the above
insurance requirements.
(b) All insurance taken out or effected in connection with the Vessel
pursuant to the provisions of Section 4.03(a) hereof shall be in a form and
upon terms acceptable to the Mortgagee and shall, without limitation, be
subject to the following:
(i) all such insurance shall be taken out in the name of the
Shipowner (other than Section 4.03 (a)(v)) with the Mortgagee's interest
noted on the policies and cover notes;
(ii) all such insurance shall be placed in the English or
American markets through first-class brokers and with first-class
underwriters, insurance companies, protection and indemnity associations
or protection and indemnity clubs. All insurance policies or entries
shall provide that they are payable in Dollars. All insurance policies
shall be valued policies and none shall provide for a deductible amount
in excess of One Hundred Thousand United States Dollars (US$100,000) or
such other amount as prudent shipowners of vessels similar to the Vessel
shall maintain. No insurance shall exclude liability for negligence of
the master, officers, crew or pilots. Each policy or entry shall
contain or be accompanied by a waiver, as against the Mortgagee, of any
and all premiums and calls for which the Mortgagee might otherwise be or
become liable as a loss payee or otherwise.
(iii) Each policy shall provide that it may not lapse, be
terminated, cancelled or materially modified without fourteen (14) days'
prior telex or telegraphic notice to the Mortgagee and any assignee,
except only such notice as war risk underwriters shall be required to
give pursuant to the automatic termination clause of current war risk
policies.
(iv) Each policy shall include a provision agreeing that no
breach of warranty or condition or want of due diligence on the part of
the Shipowner or any agent of such Shipowner shall defeat recovery of
any claim by the Collateral Trustee unless such provision shall conflict
with the available reinsurance arrangements of the issuers of such
policy.
(c) Each insurance policy taken out pursuant to Sections 4.03(a)(i)
through (iii) and Section 4.03(a)(v) through (vii) shall contain the following
notice of assignment and loss payable clause:
Notice of Assignment/Loss Payable Clause
California Petroleum Transport Corporation, as mortgagee
(the "Mortgagee"), and CalPetro Tankers (IOM) Limited (the
"Shipowner"), owner of the m.t. ____________ (the "Vessel"),
hereby give notice that by an assignment contained in an
Assignment of Earnings and Insurances, dated as of _________ __,
1994, between the Shipowner and the Mortgagee, the Shipowner
assigned to the Mortgagee as mortgagee of the Vessel, inter alia,
all of its right, title and interest under, to and in all policies
and contracts of insurance of whatsoever nature and all entries
with protection and indemnity clubs or societies now or hereafter
taken out in respect of the Vessel, its rights, disbursements,
profits or otherwise.
All claims payable shall be subject to the following
conditions:
(i) Any claim payable in respect of an actual or
constructive or arranged or agreed or compromised total loss, or
loss in the event of the confiscation, compulsory acquisition or
requisition of the Vessel, for title or use, by any government of
any country or any department, agency or representative thereof,
pursuant to any present or future law, proclamation, order, decree
or otherwise, shall be payable to the Mortgagee as mortgagee of
the Vessel, provided always that the written consent of the
Mortgagee shall be obtained prior to the arranged or agreed or
compromised total loss being agreed with the underwriters
(insurers);
(ii) All other claims shall be released to the repairer or
salvor for the repair, salvage or other charges involved or to the
Shipowner as reimbursement if it has fully repaired the damages
and paid all of the salvage and other charges;
Notwithstanding the foregoing, if there exists an Event of Default
under the First Priority Statutory Mortgage and Deed of Covenants
collateral thereto, dated _________ __, 1994, on the Vessel given
by the Shipowner in favor of the Mortgagee and the brokers and/or
underwriters (insurers) have been so notified by the Mortgagee, all
claims shall be payable to the Mortgagee as mortgagee of the
Vessel.
The underwriters (insurers) agree that the Mortgagee shall
be advised immediately of the variation or termination of this
policy (entry), and in the event of any failure by the Shipowner to
pay premiums (dues or Club calls) as and when due the Mortgagee
shall be given at least fourteen (14) days' prior telegraphic or
telex notice of the cancellation or material alteration of this
policy (entry).
The Mortgagee shall have no obligations whatsoever to pay
any premiums or costs (dues or Club calls), but shall have the
right to do so in the event of non-payment by the Shipowner. The
underwriters (insurers) shall promptly advise the Mortgagee of any
act of omission of which the Underwriters (insurers) are aware that
might void this policy (entry) or make the same invalid or
unenforceable in whole or in part.
(d) Each entry or insurance policy taken out pursuant to Section
4.01(a)(iv) shall bear the following Endorsement:
Endorsement
California Petroleum Transport Corporation, as mortgagee
(the "Mortgagee") and CalPetro Tankers (IOM) Limited (the
"Shipowner"), owner of the m.t. ____________ (the "Vessel"),
hereby give notice that by an assignment contained in an
Assignment of Earnings and Insurances, dated as of _________ __,
1994, between the Shipowner and the Mortgagee, the Shipowner
assigned to the Mortgagee as mortgagee of the Vessel all of its
right, title and interest under, to and in all policies and
contracts of insurance of whatsoever nature and all entries with
protection and indemnity clubs or societies now or hereafter taken
out in respect of the Vessel, its rights, disbursements, profits
or otherwise.
It is hereby noted that all claims shall be paid to the
Shipowner unless and until the Mortgagee shall have given notice
in writing that the Shipowner is in default under the First
Priority Statutory Mortgage and Deed of Covenants collateral
thereto, dated as of _________ __, 1994, on the Vessel given by
the Shipowner in favor of the Mortgagee in which event such claims
shall be payable to the Mortgagee as mortgagee of the Vessel. Any
modification of the terms of this insurance or cancellation or
termination by reason of nonpayment of premiums, dues,
assessments, contributions or other amounts which may become due
shall not become effective against the interests of the Mortgagee,
its successors or assigns until fourteen (14) days' prior
telegraphic or telex notice is given to the Mortgagee, its
successors or assigns of such modification, cancellation or
termination.
(e) Certified copies of all binders and cover notes or other
satisfactory written evidence showing that the required insurance of each type
has been placed, maintained or renewed and that the premiums thereon have been
paid shall be submitted to the Mortgagee on or before the date of this Deed
and the Statutory Mortgage and subsequently pro forma policies shall be
submitted for approval at least seven (7) days before liability under any
current or renewed insurance expires. No change shall be made in any
insurance without the prior written approval of the Mortgagee. Certified
copies of all policies, certificates of entry, contracts of insurance, cover
notes and renewals thereof shall be delivered to and held by the Mortgagee, and
the Shipowner shall furnish the Mortgagee with the original of the polices,
when and if requested by the Mortgagee. On the Closing Date, on each date the
Insurances are renewed as required by the terms hereof and each time there is
a significant change in the insurance coverage carried on the Vessel, the
Shipowner shall arrange for a detailed report signed by independent marine
insurance brokers acceptable to the Mortgagee, describing the insurance
coverage then carried and maintained on the Vessel (including the types of
risk covered by such polices, the amount insured thereunder and the expiration
date thereof) and stating that in the opinion of said insurance brokers such
insurance is adequate and reasonable for the protection of the Mortgagee and
that the Shipowner is in compliance with the insurance terms hereof.
(f) The Mortgagee is hereby authorized, but not required, in its own
name and/or the Shipowner's name to demand, collect, give receipt for and
prosecute all necessary actions in the courts to recover any and all insurance
monies which may become due and payable to the Shipowner under any insurance
required or permitted hereunder.
(g) If the Shipowner shall at any time fail to pay or to cause to be
paid when due any insurance premiums, club calls or other costs related to
obtaining or maintaining the insurance required hereunder, or to obtain any
required insurance or to deliver to the Mortgagee all policies, certificates
of entry, contracts of insurance, binders and cover notes and all renewals
thereof as required by the provisions of this Deed and the Statutory Mortgage,
the Mortgagee may, but shall not be required to, procure such insurances
and/or pay unpaid premiums and other costs, and the cost and expense thereof,
with interest at the Default Rate, shall be an indebtedness due from the
Shipowner to the Mortgagee secured by this Deed and the Statutory Mortgage and
shall be paid by the Shipowner promptly on demand.
(h) The Shipowner shall cause each of its insurance brokers to deliver
to the Mortgagee its undertaking substantially in the form of the letter
attached hereto as Exhibit A and made a part hereof.
(i) The Shipowner shall not do any act or cause or permit any act to
be done whereby any insurance shall be or may be suspended, impaired or
defeated.
(j) The Shipowner agrees to do all such things whatsoever and prepare,
execute and deliver all such documents whatsoever to enable the Mortgagee to
collect and recover any monies which may become due in respect of the policies
of insurance and entries and for that purpose (but without limitation) to
permit the Mortgagee if necessary to sue in the name of the Shipowner.
(k) The Shipowner agrees not to employ the Vessel or suffer the Vessel
to be employed otherwise than in conformity with the terms of the instruments
of insurance aforesaid (including any warranties express or implied therein)
without first obtaining the consent to such employment of the insurers and
complying with such requirements as to extra premium or otherwise as the
insurers may prescribe.
(l) The proceeds of any Insurances or entries shall be applied as
follows:
(i) Until the occurrence of an Event of Default:
(A) Any claim under any Insurances (other than in respect of a
Total Loss) or whether or not such claim is under the terms
of the relevant loss payable clause payable directly to the
Shipowner, shall be applied by the Shipowner in making good
the loss or damage in respect of which it has been paid to
the Shipowner in reimbursement of money expended by it for
such purpose; and
(B) Any claim in respect of protection and indemnity insurance
shall be paid directly to the person, firm or company to
which the liability covered by such insurance was incurred
or the Shipowner in reimbursement of moneys expended by it
in satisfaction of such liability;
provided always that for as long as the Charter in respect of the Vessel
remains in force, all payments other than in respect of a Total Loss
(which shall be made to the Mortgagee) shall be made to the Charterer.
(ii) Upon the occurrence of an Event of Default, subject as provided
above, any claim under any such insurance and entry shall be paid to the
Mortgagee, as assignee of the related Shipowner, and shall be applied by the
Mortgagee pursuant to the terms of the Charter unless the Charterer is in
default thereunder in which event the Mortgagee shall apply such proceeds
against payment of the Obligations.
(iii) Any claim under such insurance and entry in respect of a Total
Loss shall be paid to the Mortgagee, as assignee of the related Shipowner, and
shall be applied by the Mortgagee, after payment of the costs of collecting
such claim, as follows:
First: To the payment of all reasonable expenses and
charges, including the expenses of any taking, attorney's fees,
court costs and any other expenses or advances made or incurred by
the Mortgagee in the protection of its right or the pursuance of
its remedies under this Deed and the Statutory Mortgage, the Loan
Agreements or the other Security Documents;
Second: To the payment of all amounts due to the Mortgagee
in respect of taxes, indemnities, fees, expenses, premiums,
purchase of liens or otherwise under the provisions of this Deed
and the Statutory Mortgage;
Third: To the payment of interest on the Term Loan and
Serial Loan, pro rata, in accordance with their respective
outstanding balances, to but not including the Loss Date;
Fourth: To the payment to the Mortgagee in respect of
principal of the Term Loan and Serial Loan, pro rata, in
accordance with their respective outstanding balances; and
Fifth: To the payment of any surplus thereafter remaining
to the Shipowner or whomsoever may be lawfully entitled thereto.
Section 4.04 Defense of Title.
The Shipowner lawfully owns and is lawfully possessed of the
Vessel free from any Lien whatsoever except this Deed, the Statutory Mortgage
and Permitted Liens and shall warrant and defend the title and possession
thereto and to every part thereof for the benefit of the Mortgagee against the
claims and demands of all persons whomsoever.
Section 4.05 Discharge of Liens.
The Shipowner shall pay and discharge or cause to be paid and
discharged when due and payable unless contested in good faith from time to
time all debts, damages and liabilities whatsoever which may have given or may
give rise to maritime or possessory liens on or claims enforceable against the
Vessel and all taxes, assessments, governmental charges, fines and penalties
legally imposed on the Vessel or any income or proceeds therefrom or on the
Shipowner, the Earnings and in event of arrest of the Vessel pursuant to legal
process or in event of her detention in exercise or purported exercise of any
such lien as aforesaid to procure the release of the Vessel from such arrest
or detention as soon as possible upon receiving notice thereof but in any
event within fifteen (15) days of receiving such notice by providing bail or
otherwise as the circumstances may require.
Section 4.06. Liens.
(a) Neither the Shipowner nor its agent nor the master of the
Vessel nor any charterer of the Vessel has or shall have any right, power or
authority to create, incur or permit to be placed or imposed upon the property
or any part thereof subject or intended to be subject to this Deed and
Statutory Mortgage, any liens whatsoever without the prior written consent of
the Mortgagee, other than for Permitted Liens. A properly certified copy of
this Deed and the Statutory Mortgage shall be carried with the ship's papers
on board the Vessel, shall be exhibited to any person having business with the
Vessel which might give rise to any lien other than Permitted Liens and shall
be exhibited to any representative of the Mortgagee on demand.
(b) The Shipowner shall keep the Vessel free and clear of all
liens, security interests, charges or encumbrances (except for the Charter and
Permitted Liens).
Section 4.07 Use of Vessel.
(a) The Shipowner shall not cause or permit the Vessel to be
operated in such a way as to jeopardize the safety of the Vessel, its
Insurances or in any manner contrary to law, shall not engage in any unlawful
trade or violate any applicable law, rule or regulation of Bermuda or any
other jurisdiction in which the Vessel may operate from time to time or which
may otherwise be applicable to the Vessel or the Shipowner or carry any cargo
that shall expose the Vessel to penalty, confiscation, forfeiture, capture or
condemnation, and shall not do, suffer or permit to be done anything which can
or may injuriously affect the registration or enrolment of the Vessel under
the laws and regulations of Bermuda and shall at all times keep the Vessel
duly documented thereunder.
(b) The Shipowner shall not employ the Vessel or suffer her
employment in any trade or business which is forbidden by international law or
is otherwise illicit or in carrying illicit or prohibited goods or otherwise
use the Vessel in any manner whatsoever which renders her liable to
condemnation or to destruction, seizure or confiscation and in event of
hostilities in any part of the world (whether war is declared or not) not
allow the Vessel to enter any zone which is declared a war zone unless the
Mortgagee shall have first given its consent thereto in writing and there
shall have been effected by the Shipowner and at its expense such special
insurance cover as the Mortgagee may require.
(c) The Shipowner shall not, during hostilities (whether or not
a state of war shall have been formally declared) between any two or more
nations or in which the United Nations Organization may be involved, or during
any civil war, employ or permit the Vessel to be employed in any manner in
carrying any goods that shall or may be declared to be contraband of war or
that shall or may render her liable to confiscation, seizure, detention or
destruction unless prior to such employment special war risks policies
effected with such underwriters as the Mortgagee may approve and in all
respects to the satisfaction of the Mortgagee shall have been effected,
assigned and delivered to the Mortgagee.
(d) Upon request, the Shipowner shall give to the Mortgagee all
information regarding the Vessel, her position and engagements in the
possession of or available to the Shipowner.
(e) The Shipowner shall comply with and satisfy all of the
material provisions of any applicable law, regulation, proclamation or order
concerning financial responsibility for liabilities imposed on the Shipowner
or the Vessel with respect to pollution by any state or nation or political
subdivision thereof, including, if applicable, the United States Federal Water
Pollution Control Act, OPA and the United States Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), as any of the foregoing
may at any time be amended, and shall maintain all certificates or other
evidence of financial responsibility as may be required by any such law,
regulation, proclamation or order with respect to the trade in which the
Vessel is from time to time engaged and the cargo carried by it and shall upon
request, furnish the Mortgagee with evidence that the Shipowner has acted in
compliance with OPA and CERCLA.
Section 4.08 Notifications.
The Shipowner shall immediately notify the Mortgagee of:
(a) any marine disaster involving the Vessel that has occurred,
or any serious damage suffered by the Vessel (such notice by the
Shipowner to be given within twenty-four (24) hours after the event
shall have come to its knowledge and shall furnish the Mortgagee with
full information regarding any loss of life, other accidents or damage to
the Vessel), and in such event the Mortgagee shall have the right to
have an independent survey of the damage to the Vessel at the
Shipowner's expense provided that the same shall not cause any undue
delay in respect of the operation of the Vessel, and if such survey be
requested, the Shipowner shall lend all needed assistance.
(b) any occurrence in consequence whereof the Vessel has become
or is likely to become a Total Loss;
(c) any requirement or recommendation made by any insurer or
classification society or by any competent authority that is not
complied with immediately; and
(d) any complaint or libel filed against the Vessel, or any levy
against the Vessel, or the fact that the Vessel has been taken into
custody or detained by any proceedings in any court or tribunal or by
any government of any country or other authority, any arrest of the
Vessel or the exercise or purported exercise of any lien on the Vessel.
Section 4.09 Payment of Crew's Wages and Allotments.
The Shipowner shall promptly pay all tolls, dues and other
outgoings whatsoever in respect of the Vessel and, as and when the Mortgagee
may so require, furnish satisfactory evidence that the wages and allotment and
insurance and pension contributions of the Master and crew are being regularly
paid and that all deductions from crew's wages in respect of any tax liability
are being properly accounted for.
Section 4.10 Charter of Vessel.
The Shipowner shall not, without the prior written consent of the
Mortgagee, charter the Vessel by demise charter or by period, time or voyage
charter for any period other than to the Charterer under the Charter or any
other charterer under an Acceptable Replacement Charter. The Shipowner shall
not modify, amend or supplement the terms of the Charter without the prior
written consent of the Mortgagee.
Section 4.11 Maintenance of Vessel.
The Shipowner shall at all times and without cost or expense to
the Mortgagee or the Collateral Trustee maintain and preserve, or cause to be
maintained and preserved, the Vessel, her equipment and machinery in good
running order and repair so that the Vessel shall be, in so far as due
diligence can make her so, tight, staunch, strong and well and sufficiently
tackled, apparelled, furnished, equipped and in every respect seaworthy and in
good operating condition as will entitle her to the highest classification of
the Classification society or such other classification society of like
standing agreeable to the Mortgagee and the Trustee. The Vessel shall, and
the Shipowner covenants that it shall, at all times comply strictly with all
applicable laws, treaties and conventions of Bermuda and rules and regulations
issued thereunder and shall have on board as and when required by such rules
and regulations valid certificates showing compliance therewith. The
Shipowner shall not make or permit to be made any substantial change in the
structure, type or speed of the Vessel or change in any of her rigs without
first obtaining the written approval of the Mortgagee. The Shipowner shall
cause all repairs to and/or replacements of any damaged worn or lost parts or
equipment of the Vessel be effected in such manner both as regards workmanship
and quality of materials so as not to diminish the value or class of the
Vessel. The Shipowner shall submit the Vessel to such periodical or other
surveys as may be required for classification purposes and shall if so
required by the Mortgagee supply to the Mortgagee on request copies of all
surveys or reports issued in respect thereof.
Section 4.12 Statement of Classification Society.
The Shipowner shall furnish to the Mortgagee and the Collateral
Trustee annually from the date hereof a certificate by Det norske Veritas or
such other classification society acceptable to the Mortgagee and the
Collateral Trustee that such classification is maintained in the highest
category for ships of the same type as the Vessel free of recommendations and
notations which have not been complied with in accordance with their terms and
to furnish the Mortgagee from time to time and at any time upon demand with
all such information and copies of all such documents as the Mortgagee may
require concerning the classification of the Vessel.
Section 4.13 Surveys of Vessel.
The Shipowner shall submit the Vessel or cause the Vessel to be
submitted regularly to such periodical or other surveys as may be required for
classification purposes and if so required supply and cause to be supplied to
the Mortgagee copies of all survey reports issued in respect thereof.
Section 4.14 Access to Vessel.
The Shipowner shall use all reasonable endeavors to afford the
Mortgagee and such Persons as the Mortgagee shall from time to time appoint
for that purpose full and complete access to the Vessel at any time, on
reasonable notice and in a manner which shall not interfere with the Vessel's
trading requirements to view the state and condition thereof and her cargo and
papers and to ascertain whether the Vessel is being properly repaired and
maintained, and if default shall be made in keeping her in such good state of
repair and in such working order and condition as herein mentioned (without
prejudice however to any of the Mortgagee's rights under this Deed and the
Statutory Mortgage) the Mortgagee may (but shall not be obligated to) effect
such repairs as shall in its opinion be necessary, and the Shipowner shall on
demand repay to the Mortgagee every sum of money expended for the above
purpose with interest at the Default Rate.
Section 4.15 Books and Records.
The Shipowner shall keep proper books of account in respect of the
Vessel and as and when required by the Mortgagee make such books available for
inspection for the Mortgagee.
Section 4.16 Registration of Statutory Mortgage; Recordation of
Statutory Mortgage.
(a) The Shipowner shall not change the flag or port of
documentation of the Vessel or through any action or inaction cause the
registration of the Vessel under the laws of Bermuda to be void or voidable or
to lapse;
(b) The Shipowner shall cause this Statutory Mortgage to be
recorded or filed in a central office or at the home port of the Vessel and in
accordance with the applicable provisions of the law of Bermuda and will
otherwise comply with and satisfy all the requirements and formalities
established by the provisions of the law of Bermuda and any other pertinent
legislation of Bermuda to perfect this Statutory Mortgage as a valid and
enforceable first and preferred lien upon the Vessel and maintain this Deed as
a first priority assignment of, charge over, and security interest in the
Vessel or other property assigned thereunder and shall furnish to the
Mortgagee from time to time such evidence to the Mortgagee's satisfaction with
respect to the Shipowner's compliance with the provisions of this Section.
Section 4.17 Notice of Mortgage.
(a) The Shipowner shall at all times carry on board the Vessel a
duly certified copy of this Deed and a properly certified copy of the
Statutory Mortgage and any assignment thereof (which shall form a part of the
Vessel's papers) and cause the same to be shown to any person having business
with the Vessel which might create or imply any commitment or encumbrance
whatsoever on the Vessel and place and maintain in a frame in a conspicuous
place in the navigation room and in the cabin of the Master of the Vessel a
printed notice such that the printed area covers a space not less than six
inches wide by nine inches high in the following form:
"NOTICE OF FIRST MORTGAGE"
"This Vessel is owned by CalPetro Tankers (IOM) Limited and is
subject to a First Priority Statutory Mortgage and Deed of
Covenants collateral thereto in favor of California Petroleum
Transport Corporation, as mortgagee. Under the terms of said Deed,
neither the Shipowner nor any charterer nor the master of this
Vessel nor any other person has any power, right or authority
whatever to create incur or permit to be imposed on this Vessel
any lien or encumbrance except for Master's and crew's wages for
not more than three (3) months and salvage."
(b) Notwithstanding the requirement for the Shipowner to
maintain the Notice of Mortgage described in Section 4.17(a), so long as the
Charter is in effect, the Shipowner shall maintain the Notice of First
Mortgage described in Clause 14 of the Charter.
Section 4.18 Further Assurances.
(a) The Shipowner shall pay to the Mortgagee on demand on a full
indemnity basis all moneys whatsoever which the Mortgagee shall or may expend,
be put to or become liable for in or about the protection maintenance or
enforcement of the security created by this Deed, the Statutory Mortgage and
the other Security Documents or in or about the exercise by the Mortgagee of
any of the powers vested in the Mortgagee hereunder or thereunder including
any and all costs, charges, legal fees and expenses of the Mortgagee and shall
pay interest thereon at the Default Rate until the date of repayment by the
Shipowner both before and after judgment.
(b) The Shipowner shall do and permit to be done each and every
act or thing whatsoever which the Mortgagee may require to be done for the
purpose of enforcing the Mortgagee's rights hereunder and to allow the
Mortgagee to use the Shipowner's name as may be required for that purpose.
Section 4.19. Withholding Tax.
The Shipowner shall take any lawful action to the extent necessary
to prevent or avoid the imposition of any withholding taxes (other than any
withholding tax with respect to charterhire to the extent required to be paid
or reimbursed by any charterer pursuant to a charter) by any taxing
jurisdiction (including Bermuda) with respect to any payments under the
Obligations, including changing its jurisdiction of incorporation or
residence; provided however, that it shall not be required to take, or fail to
take, any action (i) if in the opinion of counsel such act or failure to act
would violate applicable law or (ii) if in the reasonable opinion of the
Shipowner the actions necessary to avoid or prevent imposition of such
withholding taxes would be unduly burdensome. For purposes of clause (ii) of
this paragraph a requirement to change the jurisdiction of the Shipowner's
incorporation or residence shall not be treated as unduly burdensome.
Section 4.20. Expenses.
The Shipowner shall upon demand pay to the Mortgagee (or as it may
direct) the amount of all investigation expenses, mortgage taxes, recording
charges, filing fees, revenue and documentary stamps and any other charges
incurred by the Mortgagee in connection with the preparation, completion or
registration of this Deed and the Statutory Mortgage, including without
limitation the reasonable expenses and fees of counsel to the Mortgagee.
Likewise any and all expenses incurred at any time by the Mortgagee with
respect to the mortgaged property or the protection or the enforcement of its
rights hereunder or thereunder, including without limitation the expenses and
fees of counsel to the Mortgagee, shall be paid by the Shipowner or, if paid by
the Mortgagee, shall be paid by the Shipowner promptly upon demand together
with interest thereon from the date of demand until such repayment at the
Default Rate in effect from time to time. The payment of all expenses and
other amounts under this Section 4.20 shall be secured by this Deed and the
Statutory Mortgage and no amounts payable by the Shipowner to the Mortgagee
under this Section 4.20 shall in any circumstances be repayable to the
Shipowner.
Section 4.21. Indebtedness.
The Shipowner will not directly or indirectly, create, incur,
issue, assume, guarantee or otherwise become directly or indirectly liable
with respect to, or become responsible for the payment of any indebtedness,
except for the obligations under the Shipowner's Loan Agreements.
Section 4.22. Business of Shipowner.
The Shipowner will not engage in any business other than the
ownership and operation of its Vessel as described herein and in accordance
with the Shipowner's charter and by-laws.
Section 4.23. No Bankruptcy Petition.
The Shipowner will not (i) commence any case, proceeding or other
action under any existing or future bankruptcy, insolvency or similar law
seeking to have an order for relief entered with respect to it, or seeking
reorganization, arrangement, adjustment, winding up, liquidation, dissolution,
composition or other relief with respect to its debt, (ii) seek appointment
of a receiver, trustee, custodian or other similar official for it or any part
of its assets, (iii) make a general assignment for the benefit of creditors or
(iv) take any action in furtherance of, or consenting or acquiescing in, any
of the foregoing.
Section 4.24. Consolidation, Merger and Sale of Assets.
The Shipowner shall not consolidate with, merge with or into, any
other Person or convey or transfer to any Person all or any part of the Vessel.
Section 4.25. Loans, Advances and Other Liabilities.
The Shipowner will not make any capital contributions, advances or
loans to, or investments or purchases of capital stock in, any Person, except
for Allowable Investments.
Section 4.26. Restricted Payment.
The Shipowner will not make any Restricted Payment except as set
forth in the Loan Agreements.
ARTICLE V
EVENTS OF DEFAULT; REMEDIES
Section 5.01 Events of Default.
The following shall constitute Events of Default hereunder:
(a) An Event of Default shall occur under either the Serial Loan
Agreement, the Term Loan Agreement or any Other Loan Agreement;
(b) Default in the payment of any sums payable under the Deed and the
Statutory Mortgage to the Mortgagee within two (2) Business Days
after such amount was due;
(c) Default by the Shipowner in the due observance or performance of
any covenant set forth in Sections 4.02, 4.03, 4.04, 4.06, 4.10,
4.16 and 4.26;
(d) Default in any material respect in the performance, or breach in
any material respect, of any covenant of the Shipowner (other than
Sections 4.02, 4.03, 4.04, 4.06, 4.10, 4.16 and 4.26) or if any
representation or warranty of the Shipowner made in the Deed or
the Statutory Mortgage or in any certificate or other writing
delivered pursuant thereto or in connection therewith with respect
to or affecting the Vessels shall prove to be inaccurate in any
material respect as of the time when the same shall have been
made, and, if such breach or default or inaccuracy is curable,
continuance of such default or breach or inaccuracy for a period
of 30 days after the earlier to occur of (a) actual knowledge of
such default, breach or inaccuracy by the Shipowner or (b) the
date on which there has been given by registered or certified mail
to the Shipowner by the Mortgagee a written notice thereof;
(e) The entry of a decree or order for relief by a court having
jurisdiction over the Shipowner and its assets in any involuntary
case under any applicable federal or state bankruptcy, insolvency,
or other similar law of any relevant jurisdiction now or hereafter
in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, or sequestrator (or other similar official)
for the Shipowner or for any substantial part of its property, or
ordering the winding up or liquidation of its respective affairs,
and the continuance of any such decree or order unstayed and in
effect for a period of 60 consecutive days;
(f) The commencement by the Shipowner of a voluntary case under any
applicable federal or state bankruptcy, insolvency, or other
similar law of any relevant jurisdiction now or hereafter in
effect in any jurisdiction, or the consent by the Shipowner to the
appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee or sequestrator (or other similar
official) of the Shipowner or any substantial part of its
property, or the making by the Shipowner of any general assignment
for the benefit of creditors, or the failure by the Shipowner
generally to pay its debts as they become due, or the taking of
action by the Shipowner in furtherance of any such action;
(g) The Vessel is deemed a Total Loss and the insurance proceeds
thereof have not been received by the Mortgagee within 60 days
after the date on which the Vessel was deemed a Total Loss;
provided, however, if the Vessel is under charter to the Charterer
pursuant to the Charter, such an event shall be an Event of Default
under this Deed and the Statutory Mortgage if the Mortgagee has
not received the amount payable by the Charterer in the event of a
Total Loss pursuant to the Charter within 5 business days of the
date on which such amounts are due pursuant to the Charter;
(h) The Shipowner shall abandon the Vessel;
(i) A default (as described in Clause 18 of the Charter) shall have
occurred under the Charter; or
(j) This Deed and the Statutory Mortgage or any material provision
hereof or thereof shall be deemed invalidated in whole or in part
by any present or future law of Bermuda or decision of any
competent court.
Section 5.02 Remedies.
In the event any one or more Events of Default shall have occurred
and be continuing, then, in each and every such case the Mortgagee, shall have
the right to:
(a) declare immediately due and payable all of the Obligations (in
which case all of the same shall be immediately due), and bring
suit at law, in equity or in admiralty, as it may be advised, to
recover judgment for the Obligations and collect the same out of
any and all property of the Shipowner whether covered by the Deed,
the Statutory Mortgage or otherwise;
(b) exercise all of the rights and remedies in foreclosure and
otherwise given to mortgagees by the provisions of applicable law;
(c) take and enter into possession of the Vessel, at any time,
wherever the same may be, without court decision or other legal
process and without being responsible for loss or damage and the
Mortgagee may, without being responsible for loss or damage, hold,
lay-up, lease, charter, operate or otherwise use such Vessel for
such time and upon such terms as it may deem to be for its best
advantage, and demand, collect and retain all hire, freights,
earnings, issues, revenues, income, profits, return premiums,
salvage awards or recoveries, recoveries in general average, and
all other sums due or to become due in respect of such Vessel or in
respect of any insurance thereon from any person whomsoever,
accounting only for the net profits, if any, arising from such use
of the Vessel and charging upon all receipts from use of the
Vessel or from the sale thereof by court proceedings or by private
sale all costs, expenses, charges, damages or losses by reason of
such use, and if at any time the Mortgagee avails itself of the
right given to it to take the Vessel: (i) the Mortgagee shall have
the right to dock the Vessel for a reasonable time at any dock,
pier or other premises of the Shipowner without charge, or to dock
her at any other place at the cost and expense of the Shipowner,
and (ii) the Mortgagee shall have the right to require the
Shipowner to deliver, and the Shipowner shall on demand, at its
own cost and expense, deliver to the Mortgagee the Vessel as
demanded; and the Shipowner shall irrevocably instruct the master
of the Vessel so long as the Deed and the Statutory Mortgage are
outstanding to deliver the Vessel to the Mortgagee as demanded;
(d) sell the Vessel or any share therein with or without the benefit
of any charter party or other engagement by public auction or
private contract without legal process at any place in the world
and upon such terms as the Mortgagee in its absolute discretion
may determine with power to postpone any such sale and without
being answerable for any loss occasioned by such sale or resulting
from the postponement thereof and at any such public auction the
Mortgagee may become the purchaser and shall have the right to set
off the purchase price against the Obligations;
(e) to require that all policies, contracts and other records relating
to the Insurance (including details of and correspondence
concerning outstanding claims) be forthwith delivered to such
brokers as the Mortgagee may nominate;
(f) to collect, recover, compromise and give a good discharge for all
claims then outstanding or thereafter arising under any of the
Insurance and to take over or institute (if necessary using the
name of the Shipowner) all such proceedings in connection
therewith as the Mortgagee in its absolute discretion thinks fit
and to permit the brokers through whom collection or recovery is
effected to charge and retain the usual brokerage therefor;
(g) to discharge, compound, release or compromise claims in respect of
the Vessel which have given or may give rise to any charge or lien
on the Vessel or which are or may be enforceable by proceedings
against the Vessel under the laws of all countries to whose
jurisdiction the Vessel may from time to time become subject;
(h) pending sale of the Vessel to remove the Vessel or to require the
Vessel to be removed from any place where she may be or be lying
to any port, harbor, dock or other location for the purposes of
the Vessel docking, laying up, repair, management, employment,
maintenance, or sale or to preserve or maintain the Mortgagee's
security in the Vessel in such manner as the Mortgagee may in its
complete discretion deem necessary;
(i) to discharge, store, load, tranship and otherwise handle any cargo
for the time being on board the Vessel without liability to any
third party with regard thereto;
(j) pending sale of the Vessel to manage, insure, maintain and repair
the Vessel and to hold, lease, charter, operate, employ, lay up or
otherwise use the Vessel in such manner and for such period as the
Mortgagee in its absolute discretion deems expedient accounting
only for the net profits (if any) of such use and for the purposes
aforesaid the Mortgagee shall be entitled to do all acts and things
incidental or conducive thereto and in particular to enter into
such arrangements respecting the Vessel, her insurance,
management, maintenance, repair, classification and employment and
generally to do and cause to be done all such acts and things
whatsoever and to make all such arrangements whatsoever in respect
of the Vessel or the working of the same in all respects as if the
Mortgagee were the absolute and sole owner of the Vessel and
without being responsible for any loss and damage thereby
incurred; and
(k) to recover from the Shipowner on demand all expenses, payments,
disbursements, costs, losses and damages as may be incurred by the
Mortgagee whether the Mortgagee be in possession of the Vessel or
not or in exercise by the Mortgagee of any of the powers herein
contained together with interest thereon at the Default Rate and
such expenses, payments, disbursements, costs, losses and damages
together with the said interest thereon shall, until paid by the
Shipowner to the Mortgagee, be secured on the Vessel by this Deed
and the Statutory Mortgage.
Section 5.03 Sale of the Vessel.
(a) A sale of the Vessel made in pursuance of this Deed and the
Statutory Mortgage whether under the power of sale hereby granted or any
judicial proceedings shall operate to divest all right, title and interest of
any nature whatsoever of the Shipowner herein and thereto and shall bar the
Shipowner its successors and assigns and all persons claiming by through or
under them provided such sale is by auction and that nothing herein shall be
deemed to derogate from the Shipowner's duty to the Mortgagee. Upon any such
sale, the purchaser shall not be bound to see or inquire whether the
Mortgagee's power of sale has risen in the manner provided by the Deed and the
Statutory Mortgage and the sale shall be within the power of the Mortgagee and
the receipt of the Mortgagee for the purchase money shall effectively discharge
the purchaser who shall not be concerned with the manner of application of the
proceeds of sale or be in any way answerable or otherwise liable therefor.
The Mortgagee may bid for and purchase the Vessel and upon compliance with the
terms of sale may hold, retain and dispose of the Vessel without further
accountability therefor.
(b) The Shipowner hereby irrevocably appoints the Mortgagee and
its assigns as its true and lawful attorney with full power to act alone and
with full power of substitution until the due discharge of this Deed and the
Statutory Mortgage in accordance with the laws of Bermuda to make all
necessary transfers of the Vessel sold pursuant to Section 5.02, including,
without limitation, executing and delivering all instruments of assignment and
transfer or quitclaim as the Mortgagee may require and the Shipowner hereby
does ratify and confirm all that its said attorneys shall lawfully do by
virtue hereof. Nevertheless, the Shipowner shall if so requested by the
Mortgagee ratify and confirm any such sale by executing and delivering to the
purchaser or purchasers of the Vessel such proper bills of sale, conveyances,
instruments of assignment and transfer or quitclaim and releases as may be
designated in such request.
Section 5.04 Mortgagee as Attorney-in Fact.
The Mortgagee is hereby appointed attorney-in-fact of the
Shipowner and upon the Indebtedness becoming due and payable in the name of
the Shipowner to demand, collect, receive, compromise and sue for so far as
may be permitted by law all freights, hire, earnings, issues, revenues, income
and profits of the Vessel and all amounts due from underwriters under any
insurance thereon as payment of losses or as return premiums or otherwise
salvage awards and recoveries in general average or otherwise and all other
sums due or to become due upon the Indebtedness becoming due and payable in
respect of the Vessel or in respect of any insurance thereon from any person
whomsoever and to make and give and execute in the name of the Shipowner
acquittances, receipts, releases or other discharges for the same whether under
seal or otherwise and to endorse and accept in the name of the Shipowner all
checks, notes, drafts, warrants, agreements and all other instruments in
writing with respect to the foregoing.
Section 5.05 Appointment of Receiver; Powers of Receiver.
(a) Whenever any right to enter and take possession of the Vessel
accrues to the Mortgagee, the Mortgagee may require the Shipowner to deliver
and the Shipowner shall on demand at its own cost and expense deliver to the
Mortgagee the Vessel as demanded. If any legal proceedings shall be taken to
enforce any right under this Deed and the Statutory Mortgage, the Mortgagee
shall be entitled as a matter of right to the appointment of a receiver (the
"Receiver") of the Vessel and the freights, hire, earnings, issues, revenues,
income and profits due or to become due and arising from the operation thereof.
(b) Any Receiver appointed in Section 5.05(a) above shall have all the
powers conferred on a receiver by law but, without limiting these powers:
(i) the Receiver shall have all the powers given to the
Mortgagee hereunder of taking possession of, calling in,
collecting, converting into money and selling, leasing and
dealing with the Vessel and generally shall be entitled to
the same protection and to exercise the same powers and
discretions as are given to the Mortgagee hereunder and
shall also have such other of the powers and discretions
given to the Mortgagee hereunder as the Mortgagee may from
time to time confer to him;
(ii) the remuneration of the Receiver may be fixed by the
Mortgagee (and may be or include a commission calculated by
reference to the gross amount of all money received or
otherwise), but shall be payable out of the proceeds of the
Vessel;
(iii) the Receiver shall have power to make any payment and incur
any expenditure which the Mortgagee is by this Deed
expressly or impliedly authorized to make or incur. Any
expenses incurred by the Receiver in the exercise of any of
his powers hereunder may be paid or retained by him out of
any moneys coming into his hands as receiver or may be paid
by the Mortgagee, in which case they shall be treated as
expenses properly incurred by the Mortgagee;
(iv) the Receiver shall in the exercise of his powers,
authorities and discretions conform with the reasonable
directions from time to time made and given by the Mortgagee;
(v) the Mortgagee may from time to time determine what funds the
Receiver shall be at liberty to keep in hand with a view to
the performance of his duties as receiver.
(c) Notwithstanding any other provisions of this Deed and without
limiting and as an addition to the owners conferred upon the Receiver by the
laws of Bermuda, the Mortgagee or the Receiver (as the case may require) may,
upon the receipt by the Mortgagee of a notice of Default and at any time
thereafter, exercise against or in respect of the Shipowner and/or the Vessel
any of the rights, powers, privileges or discretions conferred from time to
time by the laws of any applicable jurisdiction.
(d) All moneys arising from the exercise of the powers of the Receiver
or the Mortgagee and all other moneys received by the Receiver or the
Mortgagee shall be applied in settlement of the Indebtedness in such manner
and in such order of priority as the Mortgagee may determine.
(e) The foregoing powers of appointment of a Receiver shall be in
addition to any statutory or other powers of the Mortgagee and the Receiver
shall in any event have and be entitled to exercise all the rights, powers and
remedies conferred upon the Mortgagee by this Deed and by law with respect to
the Vessel.
Section 5.06 Arrest or Detention of Vessel.
In the event that the Vessel shall be arrested or detained by any
marshal or other officer of any court of law, equity or admiralty jurisdiction
in any country or nation of the world or by any government or other authority
and shall not be released from arrest or detention within fifteen (15) days
from the date of arrest or detention, the Shipowner hereby authorizes and
empowers the Mortgagee, its successors or assigns, to apply for and receive
possession of or to take possession of the Vessel with all the rights and
powers that the Shipowner or its successors or assigns may have, possess and
exercise in any such event, and this power of attorney shall be irrevocable
and may be exercised not only by the Mortgagee but also by an assignee or
appointee of the Mortgagee with full power of substitution to the same extent
and effect as if such assignee or appointee has been named by express
designation.
Section 5.07 Defense of Suits.
The Shipowner also authorizes and empowers the Mortgagee, and its
successors, assigns and appointees, to appear in the name of the Shipowner,
and its successors and assigns, in any court of any country or nation of the
world where a suit is pending against the Vessel because of or on account of
any alleged lien against the Vessel from which the Vessel has not been
released and to take such proceedings and do such things as to them or any of
them may seem proper toward the defense of such suit and the discharge of such
lien, and all monies expended by them or any of them for the purpose of such
defense and/or discharge shall be a debt due from the Shipowner, and its
successors and assigns, to the Mortgagee, and its successors and assigns, and
payment thereof together with interest thereon at the Default Rate (to the
extent permitted by law) from time to time in effect shall be secured by the
lien of this Deed and the Statutory Mortgage in like manner and extent as if
the amount and description thereof were written herein.
Section 5.08 Cumulative Rights, Powers and Remedies.
(a) Each and every right, power and remedy herein given to the
Mortgagee shall be cumulative and shall be in addition to every other right,
power and remedy herein given or now or hereafter existing at law, in equity,
admiralty or by statute and each and every power and remedy whether herein
given or otherwise existing may be exercised from time to time and as often
and in such order as may be deemed expedient by the Mortgagee, and the
exercise or the beginning of the exercise of any right, power or remedy shall
not be construed to be a waiver of the right to exercise at the same time or
thereafter any other power or remedy.
(b) No delay or omission of the Mortgagee to exercise any right
or power vested in it under the Security Documents or any of them shall impair
such right or power or be construed as a waiver of or as acquiescence in any
default by the Shipowner, nor shall the acceptance by the Mortgagee of any
security or any payment on account of the Indebtedness, although made after
default, be deemed a waiver of any right arising out of any future default or
of any past default, and in the event of the Mortgagee at any time agreeing to
waive any such right or power such waiver shall be revocable by the Mortgagee
at any time and the right or power shall henceforth be again exercisable as
though there had been no such waiver.
(c) In the event the Mortgagee shall have proceeded to enforce
any right or pursue any power under this Deed and the Statutory Mortgage by
foreclosure, entry or otherwise and such proceedings shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely to the Mortgagee, then and in every such case the Shipowner and the
Mortgagee shall be restored to their former positions and rights hereunder
with respect to the property subject or intended to be subject to this Deed
and the Statutory Mortgage and all rights, remedies and powers of the
Mortgagee shall continue as if no such proceedings had been taken.
Section 5.09 Application of Proceeds.
The proceeds of any sale made either under the power of sale
hereby granted to the Mortgagee or under a judgment or decree in any judicial
proceeding for the foreclosure of this Deed and the Statutory Mortgage or for
the enforcement of any remedy granted to the Mortgagee hereunder, or any net
earnings arising from the management, charter or other use of the Vessel by
the Mortgagee under any of the powers herein reserved, any amounts on deposit
to the credit of the Shipowner or the Mortgagee from earnings of the Vessel as
provided herein and any other moneys received by the Mortgagee pursuant to the
terms of this Deed and the Statutory Mortgage or in any proceeding hereunder
other than under Section 4.03(l)(ii), the application of which is not
elsewhere herein specifically provided for, shall be applied as follows:
First: To the payment of all reasonable expenses and
charges, including the expenses of any taking, attorney's fees,
court costs and any other expenses or advances made or incurred by
the Mortgagee in the protection of its right or the pursuance of
its remedies under the Loan Agreements, this Deed or the Statutory
Mortgage;
Second: To the payment of all amounts due to the Mortgagee
in respect of taxes, indemnities, fees, expenses, premiums,
purchase of liens or otherwise under the provisions of this Deed
and the Statutory Mortgage;
Third: To the payment of interest on the Term Loan and
Serial Loan, pro rata, in accordance with their respective
outstanding balances;
Fourth: To the payment of principal on the Term Loan and
Serial Loan, pro rata, in accordance with their respective
outstanding balance;
Fifth: To the payment of any amounts due and owing under the
Other Loans, pro rata, in the event of an acceleration of the
principal amount of such other loans; and
Sixth: To the payment of any surplus thereafter remaining
to the Shipowner or whomsoever may be lawfully entitled thereto.
The Shipowner has and shall have no personal liability or
obligation with respect to the amounts specified in paragraphs "FIRST" through
"FIFTH" above, which are payable solely from the income and proceeds received
by the Mortgagee from the Mortgagee's right, title and interest in and to the
Vessel.
Section 5.10 Mortgagee's Right to Remedy Defaults.
If the Shipowner shall default in the performance or observance of
any of the covenants in this Deed or the Statutory Mortgage on its part to be
performed or observed, the Mortgagee may in its discretion do any act or make
any expenditures necessary to remedy such default, and the Shipowner shall
promptly reimburse the Mortgagee, with interest at the Default Rate from time
to time in effect, for any and all expenditures so made or incurred and until
the Shipowner has so reimbursed the Mortgagee for such expenditures, the
amount thereof shall be a debt due from the Shipowner to the Mortgagee and
payment thereof shall be secured by the lien of this Deed and the Statutory
Mortgage in like manner and extent as if the amount and description thereof
were written herein, but the Mortgagee, although privileged to do so, shall
be under no obligation to the Shipowner to make any such expenditures and the
making thereof shall not relieve the Shipowner of any default in that or any
other respect. The Shipowner also shall reimburse the Mortgagee promptly with
interest at the rates referred to above for any and all advances and expenses
made or incurred by the Mortgagee at any time in taking the Vessel or
otherwise protecting its rights hereunder and for any and all damages
sustained by the Mortgagee from or by reason of any default or defaults of the
Shipowner.
Section 5.11 Delegation of Powers.
The Mortgagee may delegate to any person or persons all or any of
the trusts, powers or discretions vested in it pursuant to this Deed and the
Statutory Mortgage and any such delegations may be made upon such terms and
conditions and subject to such regulations (including power to sub-delegate)
as the Mortgagee may in its absolute discretion deem appropriate.
Section 5.12 Legal Actions.
In addition to the other provisions hereof for enforcement of the rights
of the Mortgagee under this Deed and the Statutory Mortgage, the Mortgagee
may, at its option, in the event of any default by the Shipowner, bring an
action, suit or other proceeding in rem against the Vessel to foreclose this
Deed and the Statutory Mortgage and sell the Vessel in any court in Bermuda
or any other country in which the Vessel may be found; or an action, suit or
other proceeding in personam against the Shipowner or any other person
obligated under the Loan Agreements or any of the Security Documents to
recover payment of any amount owing by the Shipowner or such other person
and/or to foreclose this Deed and the Statutory Mortgage and sell the Vessel
in any country in which the Vessel or the Shipowner or any person so obligated
may be found.
Section 5.13 Deed and Statutory Mortgage Subject to Rights of
Charterer under the Charter.
So long as the Charter is in effect, the rights of the Mortgagee
set forth in this Article V are and shall be subject to the rights of the
Charterer under the Charter. So long as the Charterer shall not be in default
under and pursuant to the terms of the Charter, the Charterer shall be
entitled to quiet enjoyment of the Vessel.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.01 Performance by Charterer or Charterer Under an
Acceptable Replacement Charter.
(a) It is hereby agreed by the parties hereto that, for the
duration of the Charter, when the Charterer, or any charterer under an
Acceptable Replacement Charter, performs and discharges its obligations under
the Charter respecting the Vessel, such performance of the said obligations by
the Charterer shall be deemed to be proper and due performance of the same
obligations of the Shipowner under this Deed, the Statutory Mortgage, the
Assignment of Earnings and other Security Documents, notwithstanding that the
extent or manner of performance of the Shipowner's obligations may differ from
that of the Charterer under the Charter.
(b) So long as the Charter is in effect, to the extent the
Shipowner's approval under the Charter is not to be unreasonably withheld, the
approval by the Mortgagee under the corresponding provisions of this Deed also
shall not be unreasonably withheld.
(c) So long as the Charter is in effect, where any obligation
with respect to the Vessel is undertaken by the Shipowner under this Deed and
the Statutory Mortgage or any other of the Security Documents but such
obligation is not undertaken by the Charterer under the Charter, then the
Shipowner shall not be treated as in default under this Deed and the Statutory
Mortgage if such obligation cannot be performed by virtue of the Charter.
(d) So long as an Acceptable Replacement Charter is in effect,
the insurance coverage required under an Acceptable Replacement Charter or
maintained by the Shipowner or charterer in connection with any other charter
entered into after the termination of the related Initial Charter must be
sufficient to maintain the credit rating of the Term Mortgage Notes by the
Rating Agencies at least at the rating applicable to the Term Mortgage Notes
immediately prior to the effectiveness of such Acceptable Replacement Charter
or other charter.
Section 6.02 Discharge of Mortgage.
The Mortgagee agrees that upon payment of the Indebtedness it
shall at the expense of the Shipowner discharge this Deed and the Statutory
Mortgage and transfer or release to the Shipowner all insurance policies and
certificates of entry relating to the Vessel freed and discharged from the
provisions herein contained.
Section 6.03 Indemnity.
The Shipowner assumes liability for and agrees to indemnify the
Mortgagee and the Holders and their respective directors, officers, employees
and agents from and against any and all liabilities, losses, damages,
penalties, costs and expenses, including legal expenses, of whatsoever kind or
nature, imposed on or asserted against any of the Mortgagee and the Holders
and such directors, officers, employees and agents in any way relating to or
arising out of the Vessel or the use thereof at any time by any party (other
than by the Mortgagee after such time as the Mortgagee shall have taken
possession of the Vessel pursuant to Section 5.02), including, without
limitation, (i) latent and other defects whether or not discovered or
discoverable by the Shipowner or any other person, (ii) claims for patent,
trademark or copyright infringement, (iii) tort or damage claims of any kind,
(iv) claims or penalties arising from any violation of the laws of any country
or political subdivision thereof and (v) claims for environmental liability or
in any way relating to applicable environmental laws.
Section 6.04 Governing Law.
THIS DEED SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
BERMUDA AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW.
Section 6.05 Severability.
If any provision of this Deed and the Statutory Mortgage is held
to be in conflict with any applicable statute or rule of law or is otherwise
held to be unenforceable for any reason whatsoever, such circumstances shall
not have the effect of rendering the provision in question inoperative or
unenforceable in any other case or circumstance, or of rendering any other
provision or provisions herein contained invalid, inoperative, or
unenforceable to any extent whatsoever.
The invalidity of any one or more phrases, sentences, clauses or
Sections of this Deed or the Statutory Mortgage, shall not affect the
remaining portions of this Deed and the Statutory Mortgage, or any part
thereof.
Section 6.06 Notices.
All demands, notices and communications hereunder shall be in
writing, personally delivered or mailed by certified mail-return receipt
requested, and shall be deemed to have been duly given upon receipt (a) in the
case of the Mortgagee, at the following address: California Petroleum
Transport Corporation, c/o JH Management Corporation, Room 6/9, One
International Place, Boston, Massachusetts 02110-2624, (b) in the case of the
Shipowner, at the following address: United House, 14-16 Nelson Street,
Douglas, Isle of Man, British Isles, or at other such address as shall be
designated by such party in a written notice to the other parties.
Section 6.07 Headings.
The captions or headings in this Deed are for convenience only and
in no way define, limit or describe the scope or intent of any provisions or
sections of this Deed or the Statutory Mortgage.
Section 6.08 General Interpretive Principles.
For purposes of this Deed except as otherwise expressly provided
or unless the context otherwise requires:
(a) the defined terms in this Deed shall include the plural as
well as the singular, and the use of any gender herein shall be deemed to
include any other gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles as in effect on the date hereof;
(c) references herein to "Articles", "Sections", "Subsections",
"paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, paragraphs and other subdivisions
of this Deed;
(d) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to paragraphs and
other subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Deed and the Statutory Mortgage as a whole and
not to any particular provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
Section 6.09 Successors and Assigns.
This Deed and the Statutory Mortgage shall inure to the benefit of
and be binding upon the Shipowner and the Mortgagee and their respective
successors and assigns.
Section 6.10 Consent to Jurisdiction.
Any legal suit, action or proceeding against the Shipowner arising
out of or relating to this Deed, the Statutory Mortgage, the Loan Agreements
or any other Security Document, or any transaction contemplated hereby or
thereby, may be instituted in any federal or state court in The City of New
York, State of New York and the Shipowner hereby waives any objection which it
may now or hereafter have to the laying of venue of any such suit, action or
proceeding, and the Shipowner hereby irrevocably submits to the jurisdiction
of any such court in any such suit, action or proceeding. The Shipowner
hereby irrevocably appoints and designates CT Corporation System, having an
address at 1633 Broadway, New York, New York, its true and lawful
attorney-in-fact and duly authorized agent for the limited purpose of accepting
service of legal process and the Shipowner agrees that service of process upon
such party shall constitute personal service of such process on the Shipowner.
The Shipowner shall maintain the designation and appointment of such
authorized agent until all amounts payable under this Deed, the Statutory
Mortgage, the Loan Agreements and the other Security Documents shall have been
paid in full. If such agent shall cease to so act, the Shipowner shall
immediately designate and appoint another such agent satisfactory to the
Mortgagee and shall promptly deliver to the Mortgagee evidence in writing of
such other agent's acceptance of such appointment.
Section 6.11 Payment.
All monies payable by the Shipowner to the Mortgagee shall be paid
in Dollars without deduction for or on account of any present or future taxes
or imposts whatsoever levied or assessed by or within any state or nation or
any political subdivision or taxing authority thereof or therein and the
Shipowner shall indemnify the Mortgagee against all such taxes or imposts.
The Shipowner shall, subject to the prior written approval of the Mortgagee
(such approval not to be unreasonably withheld), be entitled to take action in
the name of the Mortgagee at the Shipowner's expense against any taxing
authority in respect of any withholding or other taxes for which the Shipowner
have indemnified the Mortgagee, and the Mortgagee agrees to reasonably
cooperate with the Shipowner in taking such action. If as a result of any
such action any moneys are received that are attributable to such indemnified
taxes (including any interest thereon paid by such taxing authority) the same
shall be recovered by the Shipowner.
Section 6.12 No waiver of Preferred Status.
No provision of this Deed and the Statutory Mortgage shall be
deemed to be a stipulation that the Mortgagee waives the priority status of
the Statutory Mortgage given by the laws of Bermuda. Any provision of this
Mortgage which would otherwise constitute such a stipulation, to such extent,
shall have no force or effect.
Section 6.13 Conveyancing Act Restrictions.
The restriction on the right of consolidating mortgages imposed by
Section 29 of the Conveyancing Act of 1983 or any other statutory provision
having similar effect shall not apply to the mortgages hereby created or to be
created pursuant to this Deed.
IN WITNESS whereof the Shipowner has caused its common seal to be
hereunto affixed and the Mortgagee has duly executed this Deed on the day and
year first before written.
SCHEDULE 1
Defined Terms Used in the Deed
"Acceptable Replacement Charter" means any replacement charter which
satisfies each of the following requirements: (i) the charter is a bareboat
charter and requires that the charterer thereunder "gross up" charterhire
payments to indemnify and hold the Holders of the Securities harmless from any
withholding tax imposed on the charterhire payments or on the payments on the
Securities; (ii) the charterhire payments payable during the non-cancelable
term of such replacement charter, after giving effect to (1) any "gross up" of
such amounts as a result of any withholding tax on such charterhire payments,
(2) the receipt of the Termination Payment and (3) all fees and expenses
incurred in connection with the rechartering of the Vessel, provide sufficient
funds for the payment in full when due of (A) the Allocated Principal Amount
of the Term Mortgage Notes for the related Vessel and interest thereon in
accordance with the revised schedule of sinking fund and principal payments,
that is applicable upon termination of the related Initial Charter, (B) the
amount of Recurring Fees and Taxes for such Vessel, (C) the amount of
Management Fees and Technical Advisor's Fees for such Vessel, (D) the amount of
fees and expenses of the Indenture Trustee and Collateral Trustee allocable to
such Vessel and (E) an amount at least equal to 30% of the estimated amounts,
on a per annum basis, referred to in clauses (B), (C) and (D) above for
miscellaneous or unexpected expenses; and (iii) the Rating Agencies shall have
confirmed in writing to the Trustee that the terms and conditions of such
proposed charter will not result in the withdrawal or reduction of the then
current ratings of the Term Mortgage Notes.
"Allowable Investments" means for the Shipowner, its investment in the
Vessel and any Restricted Payment permitted to be made by the Shipowner and
certain obligations incurred in the ordinary course of the performance of the
Management Agreement.
"Assignment of Charter" means the assignment between the Shipowner and
the Mortgagee, as amended from time to time in accordance with the terms
thereof, together with the documents contemplated thereby, pursuant to which
the Shipowner assigns to the Mortgagee all of its right, title and interest
in, to and under the Initial Charter.
"Assignment of Earnings and Insurances" means the assignment between the
Shipowner and the Mortgagee, as amended from time to time in accordance with
the terms thereof, pursuant to which the Shipowner assigns to the Mortgagee
all of its right, title and interest in, to and under the freights and hires
(as well as any charters entered into after the Closing Date) with respect to
the Vessel.
"Assignment of Guarantee" means the assignment between the Shipowner and
the Mortgagee, as amended from time to time in accordance with the terms
thereof, pursuant to which the Shipowner assigns to the Mortgagee all of its
right, title and interest in, to and under the Chevron Guarantee.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in New York, New York, or in the city and state
where the Trustee's principal offices are located, are authorized or are
obligated by law, executive order or governmental decree to be closed.
"Charter" means that certain Bareboat Charter, dated as of July 1, 1994,
between the Charterer and Shipowner.
"Charterer" means Chevron Transport Corporation.
"Classification society" means a private organization which has as its
purpose the supervision of vessels during their construction and afterward, in
respect to their seaworthiness and upkeep, and the placing of vessels in
grades or "classes" according to the society's rules for each particular type
of vessel.
"Closing Date" means _________, 1994.
"Code" means the United States Internal Revenue Code of 1986 and the
corresponding provisions of any successor statute.
"Collateral Trustee" means Chemical Trust Company of California.
"Compulsory Acquisition" means requisition for title or other compulsory
acquisition of the Vessel (otherwise than by requisition for hire), capture,
seizure, detention or confiscation of the Vessel by any other government or by
Persons acting or purporting to act on behalf of any government or
governmental authority.
"Default Period" means the period commencing the date any payment
hereunder was due to but not including the date such payment is paid in full.
"Default Rate" means a rate per annum for each day during the Default
Period until such payment shall be paid in full equal to 1.50% above LIBOR at
the commencement of such period.
"Dollar" or "$" means the lawful currency of the United States of
America.
"Earnings" includes all monies whatsoever due or to become due to the
Shipowner at any time arising out of the use or operation of the Vessel or
otherwise including (but without prejudice to the generality of the foregoing)
all sums due and payable to the Shipowner under and pursuant to the Charter
and all freight, hire and passage monies and compensation payable to the
Shipowner in the event of requisition of the Vessel for hire, remuneration for
salvage and towage, services, demurrage and detention moneys and any other
damages for breach (or payments for variation or termination) of any
charterparty or any contract of employment of the Vessel and all earnings of
the Vessel due or to become due to the Shipowner.
"Event of Default" means an Event of Default under Section ____ of the
Loan Agreement.
"Governmental Approval" means any authorization, consent, approval,
license, franchise, lease, ruling, permit, tariff, rate, certification,
exemption, filing or registration by or with any Governmental Authority
relating to the ownership of the Collateral or to the execution, delivery or
performance of the Loan Agreement or any Security Document.
"Governmental Authority" means the federal government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any other governmental entity with authority over the
Shipowner or operation of the Vessels.
"Indebtedness" means the payment, performance or other obligations of
any kind whatsoever of the Shipowner under and pursuant to the Loan Agreements
and the Security Documents, together with interest thereon, and all other sums
which may be or become due to the Deed and the Statutory Mortgagee under or
pursuant to the terms thereof and hereof.
"Insurance" means any policies and contracts of insurance and entries in
any protection and indemnity or war risks association which are effected by or
on behalf of the Shipowner in respect of the Vessel or otherwise in connection
with the Vessel, including but not limited to any insurance monies received by
the Shipowner pursuant to clauses 12 and 13 of the Charter and including all
claims and returns of premiums thereunder and including any compensation
payable by whomsoever to the Shipowner by virtue of requisition of the Vessel
for title or confiscation or seizure of the Vessel by any government or person
or agency purporting to act on behalf of any government.
"Issue of One Debenture" means each Issue of One Debenture between the
Shipowner and the Mortgagee, as amended from time to time in accordance with
the terms thereof, pursuant to which the Shipowner grants to the Mortgagee a
security interest in all of its assets.
"Law" means any statute, law, rule, regulation, ordinance, order, code,
policy or rule of common law, now or hereafter in effect, and any judicial or
administrative interpretation thereof by a Governmental Authority or
otherwise, including any judicial or administrative order, consent decree or
judgment.
"Lien" means any mortgage, lien (statutory or other), pledge, security
interest, encumbrance, claim, hypothecation, assignment for security, deposit
arrangement or preference or other security agreement of any kind or nature
whatsoever. For purposes of the Loan Agreement, a Person shall be deemed to
own subject to a Lien any property which it has acquired or holds subject to
the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement.
"Loan Agreements" means, collectively, the Serial Loan Agreement and the
Term Loan Agreement.
"Management Agreement" means the management agreement between the
Shipowner, the Manager and Barber Ship Management Group.
"Manager" means the Person performing the duties of the Manager under the
Management Agreement, initially P.D. Gram & Co. ans.
"Obligations" means, collectively, the Serial Obligations and the Term
Obligations.
"Optional Termination Date" means either _________, 2005, ______ 2007 or
_____ 2009.
"Other Loan Agreements" means, collectively, the six loan agreements,
two each between the Mortgagee and each of the Other Owners relating to the
Other Loans.
"Other Loans" means each of the loans from California Petroleum
Transport Corporation to each of the Other Owners made on the Closing Date,
having an aggregate initial principal amount of $______________..
"Other Owners" means Calpetro Tankers (Bahamas I) Limited, Calpetro
Tankers (Bahamas II) Limited and Calpetro Tankers (Bahamas III) Limited.
"Payment Date" means each ________ and ______________ commencing
___________ 1994.
"Permitted Liens" means the Charter, liens for crew's wages accrued for
not more than three months or for collision or salvage, liens in favor of
suppliers of necessaries or other similar liens arising in the ordinary course
of its business (accrued for not more than three months) or liens for loss,
damage or expense, which are fully covered by insurance or, in respect of
which, a bond or other security has been posted by the Shipowner with the
appropriate court or other tribunal to prevent the arrest or secure the
release of the Vessel from arrest on account of such claim or lien; provided,
however, that so long as the Charter is in effect "Permitted Liens" shall mean
those liens, claims and encumbrances permitted under the Charter.
"Person" means an individual, a partnership, a corporation, a joint
venture, an unincorporated association, a joint-stock company, a trust, or
other entity or a government or any agency or political subdivision thereof.
"Proceeding" means any suit in equity, action at law, or other judicial
or administrative proceeding.
"Purchase Agreement" means the Purchase Agreement, dated as of
_________________, between the Shipowner and the Initial Charterer wherein the
Shipowner purchases the Vessel from the Initial Charterer.
"Rating Agencies" means Moody's Investors Service, Inc., Standard &
Poor's Rating Group and Duff & Phelps Credit Rating Co.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or partnership agreement or other organizational or
governing documents of such Person, and, any Law applicable to or binding upon
such Person or any of its properties or to which such Person or any of its
properties is subject.
"Security Documents" means the Loan Agreements, the Other Loan
Agreements, the Deed, the Statutory Mortgage, the Assignment of Charter, the
Assignment of Earnings and Insurances, the Assignment of Guarantee, the Stock
Pledge Agreement, the Assignment of Management Agreement, the Assignment of
Purchase Agreement, the Issue of One Debenture, collectively.
"Serial Loan" means the loan in the initial principal amount of
$________ made by the Mortgagee to the Shipowner under the Serial Loan
Agreement.
"Serial Loan Agreement" means the Loan Agreement, dated as of _________
1, 1994, between the Shipowner and the Mortgagee.
"Serial Obligations" means the payment, performance or obligations of
any kind or nature whatsoever by the Shipowner under and pursuant to the
Serial Loan Agreements, any Security Document and any instrument, agreement or
document referred to therein.
"Stock Pledge Agreement" means the Stock Pledge Agreement dated as of
______ 1, 1994, between the Mortgagee and California Tankers Investments
Limited.
"State" means any state of the United States of America and, in
addition, the District of Columbia.
"Term Loan" means the loan in the initial principal amount of $_________
made by the Mortgagee to the Shipowner under the Term Loan Agreement.
"Term Loan Agreement" means the Loan Agreement, dated as of _________ 1,
1994, between the Shipowner and the Mortgagee.
"Term Obligations" means the payment, performance or obligations of any
kind or nature whatsoever of the Shipowner under and pursuant to the Term Loan
Agreements, any Security Document and any instrument, agreement or document
referred to therein.
"Total Loss" means either (a) actual or constructive or compromised or
arranged total loss of the Vessel, (b) Compulsory Acquisition of the Vessel or
(c) if so declared by the Initial Charterer at any time and in its sole
discretion a requisition for hire of the Vessel for a period in excess of 180
days.
The Common Seal of )
Calpetro Tankers (IOM) )
Limited was hereunto )
affixed in the presence of )
- -----------------------------
Director
- -----------------------------
Director/Secretary
ACKNOWLEDGEMENT
STATE OF NEW YORK )
:ss.:
COUNTY OF NEW YORK )
On this day of _________ __ 1994_, before me personally came
__________________ to me known, and known to me to be the person who executed
the foregoing instrument, who being by me duly sworn, did depose and say that
he resides at ______________________________________ that he is the
attorney-in-fact for CalPetro Tankers (IOM) Limited the corporation described
in, and which executed the foregoing instrument; that it was so affixed by
order of the Board of Directors of said corporation and that he signed his
name thereto by like order.
EXHIBIT A
BROKER'S LETTER OF UNDERTAKING
(date)
_____________________
Re: CalPetro Tankers (IOM) Limited
Owner of m.t. (the "Vessel")
We confirm that we have effected insurances for the account of the
above Owner as set out in Appendix "A" attached hereto.
Pursuant to instructions received from CalPetro Tankers (IOM)
Limited (the "Owner"), and in consideration of your approving our appointment
as Brokers in connection with the insurances covered by this letter, we hereby
undertake:
1. to hold the Insurance Slips or Contracts, the Policies when
issued, and any renewals of such Policies or new Policies or
any Policies substituted (with your consent) therefor and
the benefit of the insurance thereunder to your order in
accordance with the terms of the Notice of Assignment and
Loss Payable Clause set out in Appendix "B" attached hereto;
and
2. to have endorsed on each and every Policy as and when the
same is issued a copy of the Notice of Assignment and Loss
Payable Clause in the form of Appendix "B" attached hereto
dated and signed by the Shipowner and acknowledged by
Underwriters in accordance with market practice; and
3. to advise you immediately of any material changes which may
be made to the terms of the insurances or if we cease to be
Brokers for purposes of said insurances; and
4. to advise you, not later than one month before expiry of
said insurances, in the event of our not having received
notice of renewal instructions from the Shipowner and/or its
agents, and in the event of our receiving instructions to
renew said insurances to advise you promptly of the details
thereof.
Our above undertakings are given subject to our lien on the
Policies for premiums for the Vessel and subject to our right of cancellation
on default in payment of such premiums. We undertake to advise you
immediately if any premiums are not paid to us by the applicable due date and
not to exercise such rights of cancellation without giving you (i) fourteen
(14) days' prior notice in writing, either by letter to the above address or
by telex or cable to ________________, respectively, and (ii) a reasonable
opportunity of paying any premiums outstanding except it is understood that in
the case of War Risks the terms of the Automatic Termination of Cover Clause
contained in the War Risks Policies shall override any undertakings given by
us as Brokers. We further undertake and agree that in the event of a total
loss of the Vessel, or an arranged, compromised or constructive total loss,
our lien on the Policies and the proceeds thereof shall be limited to any
other premiums or other amounts due in respect of Vessel or interest insured
under the Policies.
Notwithstanding the terms of the said Loss Payable clause and the
said Notice of Assignment, unless and until we receive notice from you to the
contrary, we shall be empowered to arrange for a collision and/or salvage
guaranty to be given in the event of bail being required in order to prevent
the arrest of the Vessel or to secure the release of the Vessel from arrest
following a casualty. We undertake to advise you immediately in the event of
our having arranged for a collision and/or salvage guaranty. Where a guaranty
has been given as aforesaid and the guarantor has paid an amount under the
guaranty in respect of such claim, there shall be payable directly to the
guarantor out of the proceeds of the said Policies an amount equal to the
amount so paid.
Finally, it is understood that all claims shall be collected
through us, as Brokers, and that in collecting such claims we are acting on
your behalf as assignee of the insurances covered by this letter.
Yours faithfully,
[insert name of Broker]
By:_______________________
Director
Table of Contents
Page No.
ARTICLE I
DEFINITIONS
Section 1.01 Definitions................................................... 1
ARTICLE II
SECURITY................................................................... 2
Section 2.01 Security...................................................... 2
Section 2.02 Indebtedness.................................................. 3
ARTICLE III
REPRESENTATIONS AND WARRANTIES............................................. 3
Section 3.01 Representations and Warranties of the Shipowner............... 3
ARTICLE IV
COVENANTS.................................................................. 5
Section 4.01 Payment of Indebtedness....................................... 6
Section 4.02 Corporate Existence........................................... 6
Section 4.03 Insurance..................................................... 6
Section 4.04 Defense of Title.............................................. 13
Section 4.05 Discharge of Liens............................................ 13
Section 4.06. Liens........................................................ 14
Section 4.07 Use of Vessel................................................. 14
Section 4.08 Notifications................................................. 15
Section 4.09 Payment of Crew's Wages and Allotments........................ 16
Section 4.10 Charter of Vessel............................................. 16
Section 4.11 Maintenance of Vessel......................................... 16
Section 4.12 Statement of Classification Society........................... 17
Section 4.13 Surveys of Vessel............................................. 17
Section 4.14 Access to Vessel.............................................. 17
Section 4.15 Books and Records............................................. 17
Section 4.16 Registration of Statutory Mortgage; Recordation of Statutory
Mortgage...................................................... 17
Section 4.17 Notice of Mortgage............................................ 18
Section 4.18 Further Assurances............................................ 18
Section 4.19 Withholding Tax.............................................. 19
Section 4.20 Expenses..................................................... 19
Section 4.21 Indebtedness................................................. 20
Section 4.22 Business of Shipowner......................................... 20
Section 4.23 No Bankruptcy Petition........................................ 20
Section 4.24 Consolidation, Merger and Sale of Assets..................... 20
Section 4.25 Loans, Advances and Other Liabilities......................... 20
Section 4.26 Restricted Payment............................................ 20
ARTICLE V
EVENTS OF DEFAULT; REMEDIES................................................ 21
Section 5.01 Events of Default............................................. 21
Section 5.02 Remedies...................................................... 22
Section 5.03 Sale of the Vessel............................................ 24
Section 5.04 Mortgagee as Attorney-in Fact................................. 25
Section 5.05 Appointment of Receiver....................................... 25
Section 5.06 Arrest or Detention of Vessel................................. 27
Section 5.07 Defense of Suits.............................................. 27
Section 5.08 Cumulative Rights, Powers and Remedies........................ 27
Section 5.09 Application of Proceeds....................................... 28
Section 5.10 Mortgagee's Right to Remedy Defaults.......................... 29
Section 5.11 Delegation of Powers.......................................... 30
Section 5.12 Legal Actions................................................. 30
Section 5.13 Deed and Statutory Mortgage Subject to Rights of Charterer under
the Charter.................................................... 30
ARTICLE VI
MISCELLANEOUS PROVISIONS................................................... 30
Section 6.01 Performance by Charter........................................ 30
Section 6.02 Discharge of Mortgage......................................... 31
Section 6.03 Indemnity..................................................... 31
Section 6.04 Governing Law................................................. 32
Section 6.05 Severability.................................................. 32
Section 6.06 Notices....................................................... 32
Section 6.07 Headings...................................................... 32
Section 6.08 General Interpretive Principles............................... 32
Section 6.09 Successors and Assigns........................................ 33
Section 6.10 Consent to Jurisdiction....................................... 33
Section 6.11 Payment....................................................... 34
Section 6.12 No waiver of Preferred Status................................. 34
Section 6.13 Conveyancing Act Restrictions................................. 34
ASSIGNMENT OF A FIRST PREFERRED SHIP MORTGAGE
THIS ASSIGNMENT OF THE FIRST PREFERRED SHIP MORTGAGE ("this Assignment")
is made the ___ day of _____________, 1994 by California Petroleum Transport
Corporation, a corporation organized under the laws of the State of Delaware
(herein called the "Assignor"), in favor of Chemical Trust Company of
California, a corporation organized under the laws of the State of California
(herein called the "Assignee").
W I T N E S S E T H T H A T:
WHEREAS:
(A) CalPetro Tankers (Bahamas III) Limited (herein called the
"Owner"), a corporation incorporated under the laws of the Commonwealth of The
Bahamas with its registered office at Mareva House, 4 George Street, Nassau,
Bahamas, has granted and executed a certain First Preferred Ship Mortgage
dated ____ __, 1994 (the "Mortgage") in favor of the Assignor in the amount
of U.S. $286,400,000 and interest and performance of mortgage covenants (the
"Outstanding Indebtedness") on the vessel m.t. William E. Crain, documented
under the laws of the Republic of Liberia, Official No. _______ (the
"Vessel"), the Mortgage having been recorded on _____________, 199__ at E.D.T.
in the Office of the Deputy Commissioner of Maritime Affairs of the Republic
of Liberia at New York, New York, in Book PM ____ at Page _____ to secure the
payment by the Owner to the Assignor of the Outstanding Indebtedness;
(B) The Assignor has agreed to execute and deliver to the Assignee
this Assignment, as security for the prompt and due payment to the Assignee of
certain securities issued by the Assignor, pursuant to two indentures attached
hereto as Exhibits A and B (the "Serial Indenture" and the "Term Indenture",
and collectively, the "Indentures"). Pursuant to the Serial Indenture dated
as of ____ 1, 1994, between the Assignor and the Assignee, the Assignor issued
the Serial First Preferred Mortgage Notes (the "Serial Notes") in the initial
amount of $168,500,000 and pursuant to the Term Indenture dated as of ____ 1,
1994, between the Assignor and the Assignee, the Assignor issued the Term
First Preferred Mortgage Notes in the initial amount of $117,900,000 (the
Serial Notes and the Term Notes, collectively, the "Securities"). This
Assignment is security for the due and prompt payment of the Securities and
any and all other sums which may be or become due to the Assignee and/or the
holders of the Securities under or pursuant to the Serial Indenture and the
Term Indenture, equally and ratably, and this Assignment and also to secure
the exact performance and observance and compliance with all and any of the
covenants and agreements and terms and conditions contained in the Serial
Indenture and the Term Indenture, equally and ratably, and this Assignment and
the other Security Documents (collectively, the "Indebtedness").
NOW, THEREFORE, in consideration of the premises and such other
consideration, the receipt and sufficiency of which is hereby acknowledged by
the Assignor:
1. Capitalized terms used in this Assignment and not otherwise
defined herein shall have the meanings assigned to such terms in
the Indentures, attached as Exhibits A and B hereto, and the
definitions of such terms shall be equally applicable to both the
singular and the plural forms of such terms.
2. The Assignor does hereby sell, assign, transfer and set over unto
the Assignee for the benefit of the assignee and its successors
and assigns, in consequence of the Assignment, all of the
assignor's right, title and interest in, to and under the Mortgage
and all of the assignor's right, title and interest in and to the
Vessel together with all of the boilers, engines, machinery,
masts, rigging, boats, anchors, chains, tackle, apparel,
furniture, fittings and equipment and all other appurtenances
thereto appertaining or belonging to the exclusive use of the
Vessel, whether now owned or hereafter acquired, whether on board
or not, all additions, improvements and replacements hereafter
made in or to the Vessel.
IN WITNESS WHEREOF, the Assignor has caused this Assignment to be
executed on the day and year first above written.
CALIFORNIA PETROLEUM
TRANSPORT CORPORATION
By: _______________
Name: _______________
Title:_______________
State of New York )
: ss.:
County of New York )
On the (date) day of (month), 1994, before me personally came
(attorney), to me known, who being by me duly sworn did depose and say that
he resides at (address); that he is an attorney-in-fact of California
Petroleum Transport Corporation, the corporation described in and which
executed the foregoing Assignment of Mortgage; and that he signed his name
thereto by order of the Board of Directors of said corporation.
__________________________
Notary Public
California Tankers Investments Limited
and
California Petroleum Transport Corporation
_______________________________
STOCK PLEDGE AGREEMENT
Dated as of ______ 1, 1994
_______________________________
STOCK PLEDGE AGREEMENT
This Stock Pledge Agreement dated as of ______ 1, 1994 (the
"Agreement") among CALIFORNIA TANKERS INVESTMENTS LIMITED, a Bahamian
corporation (the "Pledgor"), and CALIFORNIA PETROLEUM TRANSPORT CORPORATION,
a Delaware corporation (the "Secured Party").
PRELIMINARY STATEMENT
Simultaneously with the execution and delivery of this Agreement,
each of CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers (Bahamas II)
Limited, CalPetro Tankers (Bahamas III) Limited and CalPetro Tankers (IOM)
Limited (each, an "Owner", and collectively, the "Owners") are entering into
two Loan Agreements with the Secured Party, each dated as of the date hereof
(the "Loan Agreements") pursuant to which the Secured Party is making loans
to each of the Owners.
The Pledgor is the owner of all of the outstanding shares of the
capital stock of each of the Owners.
The Pledgor has agreed to grant to the Secured Party a security
interest in the Pledged Shares (as hereinafter defined), upon the terms and
conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, covenants and agreements herein set forth, the Pledgor hereby
agrees with the Secured Party as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1.Definitions. For the purposes of this Agreement, the
following words and terms shall have the meanings set forth below, and terms
not defined herein shall have the meanings ascribed to them in the Loan
Agreements or the Uniform Commercial Code adopted by the State of New York, as
amended from time to time in accordance therewith (the "Code").
"Pledged Collateral" shall have the meaning set forth in Section
2.1 of this Agreement.
"Pledged Shares" shall mean all of the shares of the Owners owned
by the Pledgor and pledged to the Secured Party pursuant to Section 2.1 of
this Agreement.
"Serial Obligations" means, with respect to each Owner, such
Owner's payment, performance or obligations of any kind or nature whatsoever
under and pursuant to the Serial Loan Agreement, any Security Document and
any instrument, agreement or document referred to therein.
"Term Obligations" means, with respect to each Owner, such Owner's
payment, performance or obligations of any kind or nature whatsoever under and
pursuant to the Term Loan Agreement, any Security Document and any instrument,
agreement or document referred to therein.
Section 1.2.Interpretation. In this Agreement, unless the context
otherwise requires:
(1) The terms "hereby", "hereof", "hereto", "herein",
"hereunder" and any similar terms, as used in this Agreement refer to
this Agreement and the term "hereafter" means after, and the term
"heretofore" means before, the date of this Agreement.
(2) Words of the masculine gender mean and include correlative
words of the feminine and neuter genders and words importing the
singular number mean and include the plural number and vice versa.
(3) Any headings preceding the texts of the several Articles and
Sections of this Agreement, and the table of contents appended to this
Agreement, shall be solely for convenience of reference and shall not
constitute a part of this Agreement nor shall they affect its meaning,
construction or effect.
(4) All approvals, consents and acceptances required to be given
or made by any person or party hereunder shall be at the sole discretion
of the party whose approval, consent or acceptance is required.
(5) Exhibits, if any, to this Agreement are an integral part of
this Agreement.
ARTICLE II
SECURITY INTEREST
Section 2.1.Security Interest. As security for the prompt and
unconditional payment and performance of the Serial Obligations and the Term
Obligations, equally and ratably, the Pledgor does hereby assign, pledge and
grant to the Secured Party a valid perfected security interest in and to the
following (collectively, the "Pledged Collateral"); provided, however, in the
event an Owner's Serial Obligations are satisfied and paid in full pursuant to
the terms of such Owner's Serial Loan Agreement, this Agreement and the pledge
hereunder, will be security solely and exclusively for such Owner's Term
Obligations:
(1) the Pledged Shares and the certificates representing the
Pledged Shares, and all dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares;
(2) all additional shares of stock of any issuer of the Pledged
Shares from time to time acquired by the Pledgor in any manner, and the
certificates representing such additional shares, and all dividends,
cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any
or all of such shares; and
(3) all proceeds of any and all of the foregoing (including,
without limitation, proceeds that constitute property of the types
described above).
Section 2.2.Delivery of Pledged Collateral. Concurrently
with the execution and delivery of this Agreement, the Pledgor shall deliver
to the Secured Party all stock certificates representing the Pledged Shares
together with an executed stock power for each stock certificate, representing
any of the Pledged Shares in favor of the Secured Party. The Secured Party
shall have the right, at any time in its discretion and without notice to the
Pledgor, to transfer to or to register in the name of the Secured Party or any
of its nominees any or all of the Pledged Collateral. In addition, the
Secured Party shall have the right at any time to exchange certificates or
instruments representing or evidencing the Pledged Collateral for
certificates or instruments of smaller or larger denominations. The Pledgor
shall also deliver to the Secured Party the following documents:
(i) all blank stock or share certificates of each of the
Owners;
(ii) executed undated resignations of each director and
officer of each of the Owners from time to time
substantially in the form annexed hereto marked
"Exhibit A"; and
(iii) an irrevocable proxy ("the Irrevocable Proxy") from
Pledgor in respect of all the Pledged Shares in the
form annexed hereto marked "Exhibit B".
Provided that the Secured Party will, if so required, permit any
of the Owners and/or its duly authorized representatives access to the share
register at any reasonable time for the purpose of inspection and supply of
copies thereof and provided further that the Pledgor shall procure that the
Memorandum of Association and Articles of Association, all the corporate seals
and minute books of each of the Owners are held to the order of the Secured
Party.
Section 2.3.Voting Rights; Dividends; Etc. (a) So long as no
Event of Default shall have occurred and be continuing:
(1) The Pledgor shall be entitled to exercise or refrain from
exercising any and all voting and other consensual rights pertaining to
the Pledged Collateral or any part thereof for any purpose not
inconsistent with the terms of this Agreement; provided, however, that
the Pledgor shall not exercise or refrain from exercising any such right
if, in the Secured Party's reasonable judgment, such action would have a
material adverse effect on the value of the Pledged Collateral or any
part thereof;
(2) The Pledgor shall be entitled to receive and retain any and
all dividends, distributions and other amounts paid in respect of the
Pledged Collateral, provided, however, that any and all property of the
type listed in paragraphs (A), (B) and (C) below shall be, and shall
forthwith be delivered to the Secured Party to hold as Pledged
Collateral, as security for the Term Obligations and the Serial
Obligations, equally and ratably, and shall, if received by the Pledgor,
be received in trust for the benefit of the Secured Party, be segregated
from the other property or funds of the Pledgor and be forthwith
delivered to the Secured Party as Pledged Collateral, as security for
the Term Obligations and the Serial Obligations, equally and ratably, in
the same form as so received, with any necessary indorsement or
assignment:
(A) dividends paid or payable other than in cash in respect of,
and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, the
Pledged Collateral;
(B) dividends and other distributions paid or payable in cash in
respect of any Pledged Collateral in connection with a
partial or total liquidation or dissolution;
(C) cash paid in redemption of, or in exchange for, any Pledged
Collateral; and
(3) The Secured Party shall execute and deliver (or cause to be
executed and delivered) to the Pledgor all such proxies and other
instruments as the Pledgor may reasonably request for the purpose of
enabling the Pledgor to exercise the voting and other rights which it is
entitled to exercise pursuant to paragraph (1) above and to receive the
dividends which it is authorized to receive and retain pursuant to
paragraph (2) above.
(b) Upon the occurrence and during the continuance of an Event
of Default:
(1) All rights of the Pledgor to exercise or refrain from
exercising the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant to Section 2.3(a)(1) and to
receive the dividends, distributions and other payments which he or she
would otherwise be authorized to receive and retain pursuant to Section
2.3(a)(2) shall cease and all such rights shall thereupon become vested
in the Secured Party who shall thereupon have the sole right to exercise
or refrain from exercising such voting and other consensual rights and
to receive and hold as Pledged Collateral such dividends, as security
for the Term Obligations and the Serial Obligations, equally and ratably.
(2) All dividends, distributions and other payments which are
received by the Pledgor contrary to the provisions of paragraph (1) of
this Section 2.3(b) shall be received in trust for the benefit of the
Secured Party, shall be segregated from other funds of the Pledgor and
shall be forthwith paid over to the Secured Party as Pledged Collateral,
as security for the Term Obligations and the Serial Obligations, equally
and ratably, in the same form as so received (with any necessary
indorsement).
Section 2.4.Capital Adjustments. If, prior to the payment in full
of the Obligations, there shall be any stock split, combination or exchange of
shares, consolidation, recapitalization, reorganization, or stock dividend or
any other like event by or of any of the Owners and as often as the same shall
occur, then the number, class and kind of shares of stock pledged pursuant to
this Agreement shall be appropriately adjusted to reflect such event, and
certificates, representing such shares, together with corresponding stock
powers, shall be delivered to the Secured Party in the same manner as the
Pledged Shares originally pledged under this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PLEDGOR
Section 3.1. Representations and Warranties. The Pledgor
represents and warrants to the Secured Party that:
(1) The authorized capitalization of CalPetro Tankers (Bahamas
I) Limited consists solely of 1,000 shares of common stock, one dollar
par value, of which there are 100 such shares issued and outstanding and
no shares held by CalPetro Tankers (Bahamas I) Limited as treasury
shares. All such issued and outstanding shares of common stock have
been duly authorized and validly issued and are fully paid and
nonassessable. Except as set forth on Schedule 3.1 attached hereto,
there are no subscriptions, options, warrants, rights, or other
agreements outstanding providing for the purchase, sale, or issuance of,
nor any security convertible into, shares of common stock or any other
security of CalPetro Tankers (Bahamas I) Limited.
(2) The authorized capitalization of CalPetro Tankers (Bahamas
II) Limited consists solely of 1,000 shares of common stock, one dollar
par value, of which there are 100 such shares issued and outstanding and
no shares held by CalPetro Tankers (Bahamas II) Limited as treasury
shares. All such issued and outstanding shares of common stock have
been duly authorized and validly issued and are fully paid and
nonassessable. Except as set forth on Schedule 3.1 attached hereto,
there are no subscriptions, options, warrants, rights, or other
agreements outstanding providing for the purchase, sale, or issuance of,
nor any security convertible into, shares of common stock or any other
security of CalPetro Tankers (Bahamas II) Limited.
(3) The authorized capitalization of CalPetro Tankers (Bahamas
III) Limited consists solely of 1,000 shares of common stock, one
dollar par value, of which there are 100 such shares issued and
outstanding and no shares held by CalPetro Tankers (Bahamas III) Limited
as treasury shares. All such issued and outstanding shares of common
stock have been duly authorized and validly issued and are fully paid
and nonassessable. Except as set forth on Schedule 3.1 attached hereto,
there are no subscriptions, options, warrants, rights, or other
agreements outstanding providing for the purchase, sale, or issuance of,
nor any security convertible into, shares of common stock or any other
security of CalPetro Tankers (Bahamas III) Limited.
(4) The authorized capitalization of CalPetro Tankers (IOM)
Limited consists solely of 1,000 shares of common stock, one dollar par
value, of which there are 100 such shares issued and outstanding and no
shares held by CalPetro Tankers (IOM) Limited as treasury shares. All
such issued and outstanding shares of common stock have been duly
authorized and validly issued and are fully paid and nonassessable.
Except as set forth on Schedule 3.1 attached hereto, there are no
subscriptions, options, warrants, rights, or other agreements
outstanding providing for the purchase, sale, or issuance of, nor any
security convertible into, shares of common stock or any other security
of CalPetro Tankers (IOM) Limited.
(5) The Pledgor has the power to transfer all right, title and
interest in and to the Pledged Shares owned by him, without the consent
of any other Person.
(6) The provisions of this Agreement (including the delivery of
stock certificates under Section 2.2 hereof) are effective to create in
favor of the Secured Party a valid, legal enforceable and fully
perfected first security interest in and to the Pledged Shares, free and
clear of all liens, encumbrances and claims of any kind.
(7) The Pledgor has the full power and authority to enter into
and perform its obligations under this Agreement. This Agreement has
been duly executed by the Pledgor and is the legal, valid and binding
obligation of the Pledgor, enforceable against the Pledgor in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws affecting
creditors' rights generally and by general principles of equity (whether
enforcement is sought in equity or at law). The execution, delivery and
performance of this Agreement will not conflict with any agreement or
orders or any law applicable to the Pledgor.
(8) Collectively, the Pledged Shares include all of the issued
and outstanding shares of each of the Owners.
ARTICLE IV
COVENANTS OF THE PLEDGOR
The Pledgor covenants and agrees that, unless the Secured Party
otherwise consents in writing, so long as this Agreement shall remain in
effect or any of the Obligations shall be outstanding:
Section 4.1.Transfers and Other Liens. The Pledgor agrees that it
will not sell, assign (by operation of law or otherwise) or otherwise dispose
of, or grant any option with respect to, any of the Pledged Collateral, or
create or permit to exist any lien, security interest, option or other charge
or encumbrance upon or with respect to any of the Pledged Collateral, except
for the security interest created under this Agreement; provided, however, the
Pledgor may transfer its interest in the Pledged Collateral so long as (a) the
Rating Agencies provide the Secured Party with written approval of such
transfer, (b) the Pledgor furnishes to the Secured Party any opinions of
counsel requested by the Secured Party or any Rating Agency and (c) the
transferee agrees in writing that the Pledged Collateral will remain subject
to the security interest of the Secured Party hereunder.
Section 4.2.Additional Shares. The Pledgor agrees that it will
cause each of the Owners not to issue any stock or other securities in
addition to or in substitution for the Pledged Shares.
Section 4.3.Further Assurances. The Pledgor agrees that at any
time and from time to time, at the expense of the Pledgor, the Pledgor will
promptly execute and deliver all further instruments and documents, and take
all further action, that may be necessary or desirable, in order to perfect
and protect any security interest granted or purported to be granted hereby or
to enable the Secured Party to exercise and enforce its rights and remedies
hereunder with respect to any Pledged Collateral.
Section 4.4 Covenants. To notify the Secured Party immediately
upon the appointment of any further Director or Officer of any of the Owners
and promptly to deliver to the Secured Party the undated resignations and
letters of undertaking referred to in clause 2.2 hereof signed by such persons.
Section 4.5.Right of Secured Party to Perform for Pledgor. The
Secured Party may, but shall not be obligated to, pay any amount which the
Pledgor has failed to pay or perform any act which the Pledgor has failed to
perform hereunder. Any charges so paid or losses incurred by the Secured
Party as a result of any nonperformance by the Pledgor of its obligations
under this Agreement shall be secured by this Agreement and shall be payable
by the Pledgor on the Secured Party's demand, with interest at the Default
Rate.
Section 4.6.Amendment of Corporate Documents. The Pledgor agrees
that it will not amend, modify or terminate any or all of the Memorandum of
Association or the Articles of Association of any of the Owners.
ARTICLE V
DEFAULTS; REMEDIES
Section 5.1.Defaults. Any one or more of the following events
shall constitute an "Event of Default" hereunder:
(1) failure of the Owners to pay when due any amount payable
upon or in connection with any of the Obligations, after the expiration
of the applicable grace and/or cure period, if any, provided in the Loan
Agreements with respect thereto;
(2) default by the Pledgor in the performance or observance of
any covenant, agreement or condition contained herein (other than
Section 4.3);
(3) default by the Pledgor in the performance or observance of
Section 4.3 and such default shall continue for a period of 30 days or
more after the Pledgor's receipt of written notice from the Secured
Party.
(4) if any representation or warranty made by the Pledgor herein
shall prove to have been false, incorrect or misleading in any material
respect on the date as of which made; and
(5) an Event of Default under the Loan Agreements.
Section 5.2.Remedies on Default. If an Event of Default shall
have occurred and be continuing, the Secured Party may, in addition to any
other remedy it may have, take any one or more of the following remedial steps:
(a) Transfer all or any part of the Pledged Collateral into the
name of the Secured Party or its nominee, with or without disclosing that the
Pledged Collateral is subject to the lien and security interest hereunder;
(b) Take control of any proceeds of any of the Pledged
Collateral;
(c) The Secured Party may exercise in respect of the Pledged
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the Code;
(d) Any cash held by the Secured Party as Pledged Collateral and
all cash proceeds received by the Secured Party in respect of any sale of,
collection from, or other realization upon all or any part of the Pledged
Collateral may, in the discretion of the Secured Party, be held by the Secured
Party as collateral for, and/or then or at any time thereafter be applied in
whole or in part by the Secured Party in accordance with Section 6.04 of the
Loan Agreements between the Secured Party and the Owner of the related Pledged
Collateral, or portion thereof; and
(e) Complete the undated resignations referred to in Section 2.2
hereof and to appoint Directors and Officers of the Company and to exercise
through such Directors of Officers the powers of management of any of the
Owners.
Section 5.3.Sale of Pledged Collateral. (a) The sale of Pledged
Collateral or any portion thereof may be made at any public or private sale or
at any broker's board or on any securities exchange, for cash, upon credit or
for future delivery, as the Secured Party shall deem appropriate. The Secured
Party shall be authorized at any such sale (to the extent it deems it
advisable to do so) to restrict the prospective bidders or purchasers to
persons who will represent and agree that they are purchasing such Pledged
Collateral then being sold for their own account for investment and not with a
view to the distribution or resale thereof, and upon consummation of any such
sale the Secured Party shall have the right to assign, transfer and deliver to
the purchaser or purchasers thereof of the Pledged Collateral so sold. Each
such purchaser at any such sale shall hold the property sold absolutely, free
from any claim or right on the part of the Pledgor, and the Pledgor hereby
waives (to the extent permitted by law) all rights of redemption, stay and/or
appraisal that it now has or may at any time in the future have under any rule
of law or statute now existing or hereafter enacted. Except in the case of
Pledged Collateral which threatens to decline speedily in value or is of a
type customarily sold on a recognized exchange, the Secured Party shall give
to the Pledgor at least ten (10) Business Days' written notice of the Secured
Party's intention to make any such public or private sale or sale at a
broker's board or on any such securities exchange. Such notice, in the case
of public sale, shall state the time and place fixed for such sale and, in the
case of sale at a broker's board or on a securities exchange, shall state the
board or exchange at which such sale is to be made and the day on which the
Pledged Collateral, or portion thereof to be sold, will first be offered for
sale at such board or exchange. Any such public sale shall be held at such
time or times within ordinary business hours, and at such place or places, as
the Secured Party may fix in the notice of such sale. At any such sale, the
Pledged Collateral, or portion thereof to be sold, may be sold in one lot as an
entirety or in separate parcels, as the Secured Party may determine. The
Secured Party may bid for and purchase the whole or any part of the Pledged
Collateral and may, in paying the purchase price therefor, apply such purchase
price directly to the payment or discharge in whole or in part of the
Obligations. The Secured Party may, without notice or publication, adjourn
any public or private sale or cause the same to be adjourned from time to time
by announcement at the time and place fixed for sale, and such sale may,
without further notice, be made at the time and place to which the same was so
adjourned. In case the sale of all or any part of the Pledged Collateral is
made on credit or for future delivery, the Pledged Collateral so sold may be
retained by the Secured Party until the sale price is paid by the purchaser or
purchasers thereof, but the Secured Party shall not incur any liability in
case any such purchaser or purchasers shall fail to take up and pay for the
Pledged Collateral so sold and, in the case of any such failure, the Pledged
Collateral may be sold again upon like notice. In case the sale of all or any
part of the Pledged Collateral is made on credit, the amounts actually
realized by the Secured Party from any such sale shall be applied to the Term
Obligations and the Serial Obligations in the manner provided in Section 6.04
of the related Loan Agreements. As an alternative to exercising the power of
sale herein conferred upon it, the Secured Party may proceed by a suit or
suits at law or in equity to foreclose this Agreement and to sell the Pledged
Collateral, or any portion thereof, pursuant to a judgment or decree of a
court or courts of competent jurisdiction.
(b) In connection with any disposition of the Pledged
Collateral, if the Secured Party elects to obtain the advice of any one of
three independent investment banking firms that are member firms of the New
York Stock Exchange, proposed by the Secured Party to the Pledgor and chosen
by the Pledgor within seven (7) days of receiving notice thereof, or if the
Pledgor fails to make such choice within such seven-day period, any one of
such firms chosen by the Secured Party, with respect to the method or manner
of sale or disposition of any of the Pledged Collateral, the best price
reasonably obtainable therefor and any other details concerning such sale or
disposition, then, to the extent permitted by law, any sale or other
disposition of any Pledged Collateral in reliance on such advice shall be
deemed to be commercially reasonable under the Code and otherwise proper.
(c) The Pledgor understands that compliance with Federal or
state securities laws may limit the course of conduct of the Secured Party if
the Secured Party were to attempt to dispose of all or any part of the Pledged
Collateral and may also limit the extent to which or the manner in which any
subsequent transferee of the Pledged Collateral may dispose of the same. The
Pledgor agrees that in any sale of any of the Pledged Collateral, the Secured
Party is hereby authorized to comply with any such limitation or restriction
in connection with such sale as it may be advised by counsel is necessary in
order to avoid any violation of applicable law (including, without limitation,
compliance with such procedures as may restrict the number of prospective
bidders or purchasers and/or further restrict such prospective bidders or
purchasers to persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution
or resale of the Pledged Collateral), or in order to obtain any required
approval of the sale or of the purchase by any governmental regulatory
authority or official, and the Pledgor further agrees that such compliance
shall not result in such sale being considered or deemed not to have been made
in a commercially reasonable manner, nor shall the Secured Party be liable or
accountable to the Pledgor for any discount allowed by reason of the fact that
the Pledged Collateral is sold in compliance with any such limitation or
restriction.
Section 5.4.Secured Party Appointed Attorney-in-Fact. The Pledgor
hereby irrevocably constitutes and appoints Secured Party and any officer,
employee or agent thereof, with full power of substitution, as the Pledgor's
true and lawful attorney-in-fact with full irrevocable power and authority in
the name, place and stead of the Pledgor or in its own name, from time to time
in Secured Party's discretion, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any and
all documents and instruments which may be reasonably necessary or desirable
to accomplish the purposes of this Agreement. The Pledgor hereby ratifies all
that said attorneys shall lawfully do or cause to be done by virtue hereof.
This power of attorney is a power coupled with an interest, shall be
irrevocable and shall terminate only upon payment in full of the Obligations.
The powers conferred on Secured Party hereunder are solely to protect Secured
Party's interests in the Pledged Collateral and shall not impose any duty upon
it to exercise such powers. Secured Party shall be accountable only for
amounts that it actually receives as a result of the exercise of such powers,
and neither it nor any of its officers, directors, employees or agents shall
be responsible to Pledgor for any action taken or omitted to be taken in good
faith or in reliance on the advice of counsel except only for its own gross
negligence or willful misconduct, and the foregoing shall not operate to
release the Secured Party from any liability arising out of the gross
negligence of any of its officers, directors, employees or agents in disposing
of any of the Pledged Collateral.
Section 5.5.Waivers. (A) The Pledgor waives presentment, demand,
notice, protest, notice of acceptance of this Agreement, notice of loans made,
credit extended, collateral received or delivered or other action taken in
reliance hereon and, except as otherwise expressly provided herein or in the
other Security Documents, all other demands and notices of any description.
The Secured Party shall have no duty as to the collection or protection of
Pledged Collateral or any income thereon, nor as to the preservation of rights
against prior parties, nor as to the preservation of any rights pertaining
thereto beyond the safe custody thereof.
(B) The Secured Party shall not, under any circumstances or in
any event whatsoever, have any liability for any error or omission or delay of
any kind occurring in the liquidation of or realization upon any of the
Pledged Collateral, including any instrument received in payment thereof, or
any damage resulting therefrom, except for its own gross negligence or willful
misconduct. The Pledgor shall indemnify and hold harmless the Secured Party
against any claim, loss or damage arising out of the liquidation of or
realization upon any of the Pledged Collateral, including any instrument
received in payment thereof, except that the Pledgor shall have no obligation
to indemnify and hold harmless the Secured Party from its own gross negligence
or willful misconduct.
Section 5.6.Remedies Cumulative. No remedy conferred upon or
reserved to the Secured Party hereunder is or shall be deemed to be exclusive
of any other available remedy or remedies. Each such remedy shall be
distinct, separate and cumulative, shall not be deemed to be inconsistent
with or in exclusion of any other available remedy, may be exercised in the
discretion of the Secured Party at any time, in any manner, and in any order,
and shall be in addition to and separate and distinct from every other remedy
given the Secured Party under the Loan Agreements and the other Security
Documents, any other security interest given to the Secured Party by the
Pledgor with respect to the Collateral or any other mortgage or security
agreement securing the Obligations, or now or hereafter existing in favor of
the Secured Party at law or in equity or by statute, including without
limitation, all rights of a secured party under the Code. Without limiting
the generality of the foregoing, the Secured Party shall have the right to
exercise any available remedy to recover any amount due and payable hereunder
without regard to whether any other amount is due and payable, and without
prejudice to the Secured Party to exercise any available remedy, under the
Loan Agreements, the other Security Documents or otherwise, for other events
of default existing at the time the earlier action was commenced.
Section 5.7.Delay does not Constitute Waiver.Any delay, omission
or failure by the Secured Party to insist upon the strict performance by the
Pledgor of any of the covenants, conditions and agreements herein set forth or
to exercise any right or remedy available to it upon the occurrence of an
Event of Default hereunder, an Event of Default under the Loan Agreements or
otherwise, shall not impair any such right or remedy or be considered or taken
as a waiver or relinquishment for the future right to insist upon and to
enforce, by injunction or other appropriate legal or equitable remedy, strict
compliance by the Pledgor with all of the covenants, conditions and agreements
herein or otherwise, or of the right to exercise any such rights or remedies
if such default by the Pledgor be continued or repeated.
ARTICLE VI
MISCELLANEOUS
Section 6.1.Amendment. This Agreement may be amended from time to
time by written agreement signed by the parties hereto.
Section 6.2.Severability. If any provision of this Agreement is
held to be in conflict with any applicable statute or rule of law or is
otherwise held to be unenforceable for any reason whatsoever, such
circumstances shall not have the effect of rendering the provision in question
inoperative or unenforceable in any other case or circumstance, or of
rendering any other provision or provisions herein contained invalid,
inoperative, or unenforceable to any extent whatsoever. The invalidity of any
one or more phrases, sentences, clauses or Sections of this Agreement
contained, shall not affect the remaining portions of this Agreement, or any
part thereof.
Section 6.3.Notices. All demands, notices and communications
hereunder shall be in writing, personally delivered or mailed by certified
mail-return receipt requested, and shall be deemed to have been duly given
upon receipt (a) in the case of the Pledgor, at the following address: United
House, 14-16 Nelson Street, Douglas, Isle of Man, and (b) in the case of the
Secured Party, at the following address: c/o JH Management Corporation, Room
6/9, One International Place, Boston, Massachusetts 02110-2624, or at other
such address as shall be designated by such party in a written notice to the
other parties.
Section 6.4.Consent to Jurisdiction. Any legal suit, action or
proceeding against the Pledgor arising out of or relating to this Agreement,
the Loan Agreements or any other Security Document, or any transaction
contemplated hereby or thereby, may be instituted in any federal or state
court in The City of New York, State of New York and the Pledgor hereby waives
any objection which they may now or hereafter have to the laying of revenue of
any such suit, action or proceeding, and the Pledgor hereby irrevocably
submits to the jurisdiction of any such court in any such suit, action or
proceeding. The Pledgor hereby irrevocably appoints and designate CT
Corporation System, having an address at 1633 Broadway, New York, New York,
its true and lawful attorney-in-fact and duly authorized agent for the limited
purpose of accepting service of legal process and the Pledgor agrees that
service of process upon such party shall constitute personal service of such
process on the Pledgor. The Pledgor shall maintain the designation and
appointment of such authorized agent until all amounts payable under this
Agreement, the Loan Agreements and the other Security Documents shall have
been paid in full. If such agent shall cease to so act, the Pledgor shall
immediately designate and appoint another such agent satisfactory to the
Secured Party and shall promptly deliver to the Secured Party evidence in
writing of such other agent's acceptance of such appointment.
Section 6.5.Captions. The captions or headings in this Agreement
are for convenience only and in no way define, limit or describe the scope or
intent of any provisions or sections of this Agreement.
Section 6.6.Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York, without
giving effect to the principles of conflicts of law.
Section 6.7.No Partnership. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture among the parties
hereto and the services of each party shall be rendered as an independent
contractor and not as agent for any other party.
Section 6.8.Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto on separate
counterpart, each of which shall be deemed to be an original. Such
counterparts shall constitute one and the same agreement.
Section 6.9.Survival. The representations, covenants and
agreements contained in or made pursuant to this Agreement in respect of
either party hereto shall survive the execution and delivery of this Agreement
and shall continue in effect so long as such party's obligations hereunder
remain outstanding.
Section 6.10.Integration. This Agreement and the Exhibits hereto
constitute the entire agreement and understanding between the parties hereto
with respect to the subject matter hereof and supersedes all prior agreements,
understandings or representations pertaining to the subject matter hereof,
whether oral or written. There are no warranties, representations or other
agreements between the parties in connection with the subject matter hereof
except as specifically set forth or incorporated herein.
Section 6.11.Reproduction of Documents. This Agreement and all
documents relating thereto, including, without limitation, (a) consents,
waivers and modifications which may hereafter be executed, (b) documents
received by any party at the closing, and (c) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made in the regular course
of business) and that any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence.
Section 6.12.Successors and Assigns; Assignment. This Agreement
shall be binding upon and inure to the benefit of the Pledgor and the Secured
Party and their respective successors and assigns. The Owner shall not have
the right to assign its rights hereunder or any interest herein without the
prior written consent of the Lender. The Lender, at its sole option, shall
have the right to assign this Assignment, the Serial Loan Agreement, the Term
Loan Agreement, the Security Documents and any of its rights and interest
hereunder and thereunder.
Section 6.13.General Interpretive Principles. For purposes of
this Agreement except as otherwise expressly provided or unless the context
otherwise requires:
(a) the defined terms in this Assignment shall include the
plural as well as the singular, and the use of any gender herein shall be
deemed to include any other gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles as in effect on the date hereof;
(c) references herein to "Articles", "Sections", "Subsections",
"paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, paragraphs and other subdivisions
of this Agreement;
(d) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to paragraphs and
other subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
Section 6.14.Effective Date of Transaction. Notwithstanding and
the fact that this Agreement is dated as of ______ 1, 1994, the transactions
set forth herein shall not be effective until the Closing Date.
Section 6.15.Return of Pledged Shares. Upon the payment and
performance in full of the Term Obligations and the Serial Obligations, the
Secured Party shall redeliver the related Pledged Shares to the Pledgor.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
CALIFORNIA TANKERS INVESTMENTS LIMITED
By:
Name:
Title:
CALIFORNIA PETROLEUM TRANSPORT CORPORATION
By:
Name:
Title:
Exhibit A
Letter of resignation referred to in Clause 2.2
To: [Name of Owner]
(the "Company")
Date:
Dear Sirs:
1. I hereby resign as a director/secretary (or other officer)
of the Company and confirm that I have no claims against the
Company for loss of office, arrears of pay or otherwise
howsoever.
2. This resignation is to be effective as at the date hereof.
Yours faithfully,
Exhibit B
Irrevocable Proxy
The undersigned, being the owner (and as assignee holder respectively)
of one hundred per cent of the number of shares respectively set against its
name at the foot of this proxy of [Name of Owners] (the "Company") hereby
makes, constitutes and appoints California Tankers Investments Limited (the
"Secured Party") the true and lawful attorney and proxy of the undersigned
with full power to appoint a nominee or nominees to act hereunder from time to
time to vote the number of shares set against the names of the undersigned at
the foot of this proxy of the issued share capital of the Company at all
annual and special meetings of shareholders for the Company with the same
force and effect as the undersigned might or could do and the undersigned
hereby ratifies and confirms all that the said attorney or its nominee or
nominees shall do or cause to be done by virtue hereof.
The said shares have been pledged to the Secured Party pursuant to an
Agreement dated as of ______ 1, 1994.
This power and proxy may not be assigned.
Shareholder No. of Shares
______________ _____
IN WITNESS whereof this instrument has been duly executed this ____ day
of _______ 1994.
SIGNED, SEALED and DELIVERED
by
the duly authorized Attorney-in-Fact
of California Tankers Investments Limited
in the presence of:
Witness __________________
Witness __________________
______________________________________________________________________________
______________________________________________________________________________
California Petroleum Transport Corporation
and
CalPetro Tankers (Bahamas I) Limited
___________________________________
ASSIGNMENT OF GUARANTEE
Dated as of __________ 1, 1994
___________________________________
______________________________________________________________________________
______________________________________________________________________________
Assignment of Guarantee, dated as of __________ 1, 1994
(the "Assignment"), between California Petroleum Transport Corporation, a
corporation organized under the laws of the State of Delaware (the
"Lender") and CalPetro Tankers (Bahamas I) Limited, a company organized
under the laws of The Commonwealth of the Bahamas (the "Owner").
PRELIMINARY STATEMENT
The Owner has requested that the Lender make two loans to the
Owner: one loan in the aggregate principal amount equal to $____________ (the
"Term Loan") and one series of loans in the aggregate principal amount equal
to $____________ (collectively, the "Serial Loans" and, collectively with the
Term Loan, the "Loans"). The Loans will be made pursuant to the terms and
conditions of two Loan Agreements, each dated as of the date hereof, each
between the Lender and the Owner. The net proceeds of the Serial Loans and
the Term Loan will be used by the Owner to acquire the m.t. _________ (the
"Vessel") from Chevron Transport Corporation (the "Initial Charterer"). The
Vessel will be bareboat chartered to the Initial Charterer pursuant to the
Bareboat Charter (the "Initial Charter"), dated as of the date hereof, between
the Owner and the Initial Charterer. The obligations of the Initial Charterer
under the Initial Charter will be guaranteed by Chevron Corporation (the
"Guarantor") pursuant to a Guarantee, dated as of the date hereof (the
"Guarantee"). As collateral security for its obligations under the Loan
Agreements, the Owner will assign, pledge, mortgage and grant the Lender a
security interest in, inter alia, the Vessel, the Initial Charter and the
Guarantee.
NOW, THEREFORE, in consideration of the premises and of the
covenants herein contained, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this Assignment shall have the meanings
assigned to such terms in Schedule 1 to this Assignment, and the definitions
of such terms shall be equally applicable to both the singular and plural
forms of such terms.
ARTICLE II
ASSIGNMENT
Section 2.01 Security Interest. This Assignment is made and
delivered as security for the Serial Obligations and the Term Obligations,
equally and ratably; provided, however, in the event that the Serial
Obligations are satisfied and paid in full pursuant to the terms and
conditions of the Serial Loan Agreement, this Assignment will be security
solely and exclusively for the Term Obligations.
Section 2.02 Assignment. (a) In order to provide for the payment
of and as security for the Serial Obligations and the Term Obligations,
equally and ratably, the Owner has sold, assigned, transferred, set over and
granted a security interest and does hereby sell, assign, transfer, set over
and grant a security interest unto the Lender, its successors and assigns, for
its and their respective successors' and assigns' own proper use and benefit,
all of the Owner's right, title and interest in and to the Guarantee,
including without limitation any moneys whatsoever payable to the Owner under
the Guarantee, together with the income and proceeds thereof and all other
rights and benefits whatsoever accruing to the Owner under the Guarantee;
provided, however, that the Owner shall keep the Lender fully and effectively
indemnified from and against all actions, losses, claims, proceedings, costs,
demands and liabilities which may be suffered by the Lender under or by virtue
of the Guarantee or this Assignment; provided further, however, in the event
that the Serial Obligations are satisfied and paid in full pursuant to the
terms and conditions of the Serial Loan Agreement, the sale, assignment,
transfer and grant of security interest made by the Owner pursuant to the
terms of this Assignment will be solely and exclusively for the benefit of the
Lender as Lender under the Term Loan Agreement and this Assignment will be
security solely and exclusively for the Term Obligations.
(b) Any and all rights assigned herein may be further assigned by
the Lender, including, without being limited to, assignments in connection
with the enforcement of the assignments made by this Assignment and any
subsequent holder of this Assignment shall succeed to and have all the rights
and powers of the Lender under this Assignment.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE OWNER
The Owner hereby represents and warrants to the Lender as follows:
Section 3.01 Organization, Power and Status of the Owner. The
Owner (a) is a corporation duly formed, validly existing and in good standing
under the laws of The Bahamas and (b) is duly authorized, to the extent
necessary, to do business in each jurisdiction where the character of its
properties or the nature of its activities makes such qualification necessary.
The Owner has all requisite corporate power and authority to own and operate
the property it purports to own and to carry on its business as now being
conducted and as proposed to be conducted in respect of the Vessel.
Section 3.02 Authorization; Enforceability; Execution and Delivery.
(a) The Owner has all necessary corporate power and authority to execute,
deliver and perform under this Assignment.
(b) All action on the part of the Owner that is required for the
authorization, execution, delivery and performance of this Assignment has been
duly and effectively taken; and the execution, delivery and performance of
this Assignment does not require the approval or consent of any Person except
for such consents and approvals as have been obtained on or prior to the
Closing Date.
(c) This Assignment has been duly executed and delivered by the
Owner. This Assignment constitutes the legal, valid and binding obligation of
the Owner, enforceable against it in accordance with the terms thereof.
Section 3.03 No Conflicts; Laws and Consents; No Default. (a)
Neither the execution, delivery and performance of this Assignment nor the
consummation of any of the transactions contemplated hereby nor performance of
or compliance with the terms and conditions hereof (i) contravenes any
Requirement of Law applicable to the Owner or (ii) constitutes a default under
any Security Document.
(b) The Owner is in compliance with and not in default under any
and all Requirements of Law applicable to the Owner and all terms and
provisions of this Assignment.
Section 3.04 Governmental Approvals. All Governmental Approvals
which are required to be obtained in the name of the Owner in connection with
the execution, delivery and performance by the Owner of this Assignment have
been obtained and are in effect on the Closing Date.
Section 3.05 Litigation. There are no actions, suits or
proceedings at law or in equity or by or before any Governmental Authority now
pending against the Owner or, to the best of the Owner's knowledge, threatened
against the Owner or pending or threatened against any property or other
assets or rights of the Owner with respect to this Assignment.
Section 3.06 No Prior Assignment. The Owner has not assigned or
pledged, and hereby covenants that it will not assign or pledge, so long as
this Assignment shall remain in effect, the Guarantee or any part of the
rights, titles and interests hereby assigned, to anyone other than the Lender,
or its successors or assigns.
ARTICLE IV
COVENANTS OF THE OWNER
The Owner hereby covenants and agrees that so long as any of the
Serial Obligations or Term Obligations remains outstanding:
Section 4.01 Consent of Guarantor. On the Closing Date, the Owner
shall deliver to the Guarantor a copy of this Assignment and shall procure the
execution by the Guarantor of the Consents and Acknowledgment set out in
Exhibit A hereto and deliver said Consents and Acknowledgment to the Lender on
the Closing Date.
Section 4.02 Enforcement of Guarantee. (a) The Owner will do or
permit to be done each and every act or thing which the Lender may from time
to time require to be done for the purpose of enforcing the Lender's rights
under the Guarantee and this Assignment.
(b) If an Event of Default shall occur under either the Term
Loan Agreement or the Serial Loan Agreement, the Owner shall cause all moneys
hereby assigned or agreed to be assigned or arising from or in connection with
any of the rights, title, interest and benefits of the Owner under the
Guarantee shall be paid to the credit of Account No. _____________ of the
Lender at Chemical Trust Company of California, or to such other account as
the Lender may from time to time direct.
(c) The Owner will not exercise any right or powers conferred on
it by the Guarantee in connection with any default or alleged default by the
Guarantor thereunder (including without limitation the right of termination
and substitution) unless and until requested so to do by the Lender whereupon
the Owner agrees that it will do so provided always that the Lender shall not
be responsible in any way whatsoever in the event that the exercise of any
right or power (including the right of termination and substitution) be
thereafter adjudged improper or to constitute a repudiation of the Guarantee
by the Owner.
Section 4.03 Amendment of Guarantee; Assignment of Guarantee. (a)
The Owner will not, except with the previous written consent of the Lender,
agree to any variation of the Guarantee or release the Guarantor from any of
its obligations thereunder or waive any breach of the Guarantor's obligations
thereunder or consent to any such act or omission of the Guarantor as would
otherwise constitute such breach.
(b) The Owner will not, except with the previous written consent
of the Lender, assign the Guarantee to any other Person.
Section 4.04 Further Assurances. The Owner will at any time and
from time to time, upon the written request of the Lender, promptly and duly
execute and deliver any and all such further instruments and documents and
take such action as the Lender may deem desirable in order to obtain the full
benefits of this Assignment and of the rights and powers herein granted.
Section 4.05 Lender as Attorney-in-Fact of Owner. The Owner hereby
constitutes the Lender, and its successors and assigns, its true and lawful
attorney-in-fact, irrevocably, with full power in its own name, in the name of
its agents or nominees or in the name of the Owner or otherwise, to ask,
require, demand, receive, enforce and give acquittance for, any and all moneys
and claims for moneys due and to become due and payable under or arising out
of the Guarantee, to endorse any checks or other instruments or orders in
connection therewith and to file any claims or take any action or institute
any proceedings which to the Lender may seem to be necessary or advisable
under this Assignment. Any action or proceeding brought by the Lender
pursuant to any of the provisions of this Assignment or otherwise and any
claim made by the Lender hereunder may be compromised, withdrawn or otherwise
dealt with by the Lender without any notice to or approval of the Owner.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01 Amendment. This Assignment may be amended from time
to time by written agreement signed by the parties hereto.
Section 5.02 Severability. If any provision of this Assignment is
held to be in conflict with any applicable statute or rule of law or is
otherwise held to be unenforceable for any reason whatsoever, such
circumstances shall not have the effect of rendering the provision in question
inoperative or unenforceable in any other case or circumstance, or of
rendering any other provision or provisions herein contained invalid,
inoperative, or unenforceable to any extent whatsoever. The invalidity of any
one or more phrases, sentences, clauses or Sections of this Assignment
contained, shall not affect the remaining portions of this Assignment, or any
part thereof.
Section 5.03 Notices. All demands, notices and communications
hereunder shall be in writing, personally delivered or mailed by certified
mail-return receipt requested, and shall be deemed to have been duly given
upon receipt (a) in the case of the Lender, at the following address: c/o JH
Management Corporation, Room 6/9, One International Place, Boston,
Massachusetts 02110-2624, (b) in the case of the Owner, at the following
address: United House, 14-16 Nelson Street, Douglas, Isle of Man, or at other
such address as shall be designated by such party in a written notice to the
other parties.
Section 5.04 Consent to Jurisdiction. Any legal suit, action or
proceeding against the Owner arising out of or relating to this Assignment, or
any transaction contemplated hereby, may be instituted in any federal or state
court in The City of New York, State of New York and the Owner hereby waives
any objection which it may now or hereafter have to the laying of venue of any
such suit, action or proceeding, and the Owner hereby irrevocably submits to
the jurisdiction of any such court in any such suit, action or proceeding.
The Owner hereby irrevocably appoints and designates CT Corporation System,
having an address at 1633 Broadway, New York, New York, its true and lawful
attorney-in-fact and duly authorized agent for the limited purpose of
accepting servicing of legal process and the Owner agrees that service of
process upon such party shall constitute personal service of such process on
such Person. The Owner shall maintain the designation and appointment of such
authorized agent until all amounts payable under this Assignment shall have
been paid in full. If such agent shall cease to so act, the Owner shall
immediately designate and appoint another such agent satisfactory to the Lender
and shall promptly deliver to the Lender evidence in writing of such other
agent's acceptance of such appointment.
Section 5.05 Captions. The captions or headings in this Assignment
are for convenience only and in no way define, limit or describe the scope or
intent of any provisions or sections of this Assignment.
Section 5.06 Governing Law. This Assignment shall be governed by
and interpreted in accordance with the laws of the State of New York, without
giving effect to the principles of conflicts of law.
Section 5.07 No Partnership. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture among the parties
hereto and the services of each party shall be rendered as an independent
contractor and not as agent for any other party.
Section 5.08 Counterparts. This Assignment may be executed in any
number of counterparts and by different parties hereto on separate
counterpart, each of which shall be deemed to be an original. Such
counterparts shall constitute one and the same agreement.
Section 5.09 Survival. The representations, covenants and
agreements contained in or made pursuant to this Assignment in respect of
either party hereto shall survive the execution and delivery of this
Assignment and shall continue in effect so long as such party's obligations
hereunder remain outstanding.
Section 5.10 Integration. This Assignment and the Schedule and
Exhibits hereto constitute the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements, understandings or representations pertaining to the subject
matter hereof, whether oral or written. There are no warranties,
representations or other agreements between the parties in connection with the
subject matter hereof except as specifically set forth or incorporated herein.
Section 5.11 Reproduction of Documents. This Assignment and all
documents relating thereto, including, without limitation, (a) consents,
waivers and modifications which may hereafter be executed, (b) documents
received by any party at the closing, and (c) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made in the regular course
of business) and that any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence.
Section 5.12 Successors and Assigns; Assignment. This Assignment
shall be binding upon and inure to the benefit of the Owner and the Lender and
their respective successors and assigns. The Owner shall not have the right
to assign its rights hereunder or any interest herein without the prior
written consent of the Lender. The Lender, at its sole option, shall have the
right to assign this Assignment, the Serial Loan Agreement, the Term Loan
Agreement, the Security Documents and any of its rights and interest hereunder
and thereunder.
Section 5.13 General Interpretive Principles. For purposes of this
Assignment except as otherwise expressly provided or unless the context
otherwise requires:
(a) the defined terms in this Assignment shall include the
plural as well as the singular, and the use of any gender herein shall be
deemed to include any other gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles as in effect on the date hereof;
(c) references herein to "Articles", "Sections", "Subsections",
"paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, paragraphs and other subdivisions
of this Assignment;
(d) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to paragraphs and
other subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Assignment as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
Section 5.14 Effective Date of Transaction. Notwithstanding and
the fact that this Assignment is dated as of __________ 1, 1994, the
transactions set forth herein shall not be effective until the Closing Date.
IN WITNESS WHEREOF, the Owner and the Lender have caused this
Assignment to be duly executed and delivered by their respective officers
thereunto duly authorized all as of the day and year first above written.
CALIFORNIA PETROLEUM TRANSPORT
CORPORATION, as Lender
By:__________________________
Name:________________________
Title:_______________________
CALPETRO TANKERS (BAHAMAS I) LIMITED, as Owner
By:__________________________
Name:________________________
Title:_______________________
Exhibit A
LETTER OF CONSENT AND ACKNOWLEDGMENT
TO ASSIGNMENT OF GUARANTEE
Chemical Trust Company of California,
as Collateral Trustee
California Petroleum Transport Corporation,
as Lender
Dear Sirs:
Chevron Corporation (the "Guarantor") hereby acknowledges notice
of and consents to the terms of (i) the Assignment of Guarantee (the
"Assignment") dated the ___ day of __________, 1994 and made between Calpetro
Tankers (Bahamas I) Limited (the "Owner") and California Petroleum Transport
Corporation (the "Lender") as adequate notice of such assignment to the Lender
of the Guarantee (as defined in the Assignment) and of all the right, title
and interest of the Owner in, to and under the Guarantee and (ii) the
Collateral Assignment of Guarantee (the "Collateral Assignment") dated the
______ day of ___________, 1994 and made by and between the Lender and
Chemical Trust Company of California (the "Collateral Trustee") as adequate
notice of the further assignment of the Guarantee and all of the right, title
and interest of the Lender in, to and under the Guarantee. Any capitalized
term not otherwise defined herein shall have the meaning assigned to such term
in the Assignment.
The Guarantor confirms that it (a) has reviewed the terms of the
Charter and (b) understands the rights and obligations of Chevron Transport
Corporation (the "Charterer") pursuant to the terms and conditions thereof.
Notwithstanding anything to the contrary contained in the
Guarantee including without limitation the Guarantor's right to terminate the
Guarantee as provided therein, so long as the Charter, the Assignment and the
Collateral Assignment are each in effect and the Collateral Trustee has rights
in the Charter and the Guarantee, the Guarantor hereby agrees the Guarantee
will continue in full force and effect and that, upon notification to the
Guarantor of the occurrence of an Event of Default under the Indenture
referred to in the Assignment, the Guarantor shall (i) perform any and all
obligations which the Guarantor is obligated to perform according to the
Guarantee and (ii) pay any and all sums which the Guarantor is obligated to pay
according to the Guarantee, as modified by the terms of this Letter of
Consent, directly to the Collateral Trustee at Account No. ________________,
at ______________, or otherwise to such other account as the Collateral
Trustee may at any time or from time to time, designate by notice to the
Guarantor in writing.
Payments to the Collateral Trustee shall not be subject to any
right of set-off or defense by way of counterclaim or otherwise which the
Guarantor may have against the Owner or any entity substituted for it and all
payments once made to the Collateral Trustee will be final, and once paid the
Guarantor will not, for any reason whatsoever, seek to recover from the Lender
any such payment made to the Lender by virtue of the Assignment or this Letter
of Consent.
The Guarantor confirms to the Lender and the Collateral Trustee
that (a) the Guarantor is a corporation duly organized and existing in good
standing under the laws of the State of Delaware, (b) the making and
performance of this Letter of Consent in accordance with its terms have been
duly authorized by all necessary corporate action on the part of the
Guarantor, do not contravene the Guarantor's Certificate of Incorporation or
any indenture, credit agreement or other contractual agreement to which the
Guarantor is a party or by which it is bound or any law binding on the
Guarantor, (c) the making and performance of the Guarantee in accordance with
its terms have been duly authorized by all necessary corporate action on the
part of the Guarantor, do not require any stockholder approval, do not
contravene the Guarantor's Certificate of Incorporation or any indenture,
credit agreement or other contractual agreement to which the Guarantor is a
party or by which it is bound, and do not, as to the making thereof,
contravene any law binding on the Guarantor and, to the best knowledge of the
Guarantor do not, as to the performance thereof, contravene any law binding on
the Guarantor, (d) the Guarantee constituted as of the date thereof and at all
times thereafter, to and including the date of this Letter of Consent, a
binding obligation of the Guarantor enforceable against the Guarantor in
accordance with its terms, and this Letter of Consent is a binding obligation
of the Guarantor enforceable against the Guarantor in accordance with its
terms, (e) the terms of the Guarantee remain in full force and effect and
constitutes, as modified by this Letter of Consent, the entire agreement
between the parties thereto, (f) the terms of the Guarantee have not been
varied or modified, other than pursuant to the terms of this Letter of
Consent, and that the terms of the Guarantee will not after the date hereof be
varied or modified without the prior written consent of the Collateral Trustee
and (g) the Guarantor has received no prior notice of any assignment by the
Owner of any interest in the Guarantee.
The Guarantor covenants:
(a) to file with the Trustee, within 15 days after the Guarantor
is required to file the same with the Commission, copies of the annual
reports and of the information, documents, and other reports (or copies
of such portions of any of the foregoing as the Commission may from time
to time by rules and regulations prescribe) which the Guarantor may be
required to file with the Commission pursuant to Section 13 or 15(d) of
the Exchange Act, or, if the Guarantor is not required to file
information, documents, or reports pursuant to either of such Sections
of the Exchange Act, then to file with the Trustee and the Commission,
in accordance with rules and regulations prescribed from time to time by
the Commission, such of the supplementary and period information,
documents, and reports which may be required pursuant to Section 13 of
the Exchange Act, or, in respect of a security listed and registered on
a national securities exchange, as may be prescribed from time to time
in such rules and regulations;
(b) to file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional information, documents, and reports with
respect to compliance by the Guarantor with the conditions and covenants
provided for in the Indentures as may be required from time to time by
such rules and regulations;
(c) to transmit to the holders of the Securities in the manner
and to the extent required by Section 313(c) of the Trust Indenture Act,
within 30 days after the filing thereof with the Trustee, such summaries
of any information, documents and reports required to be filed by the
Guarantor pursuant to subsections (a) and (b) of this Letter of Consent
as may be required by rules and regulations prescribed from time to time
by the Commission; and
(d) furnish to the Trustee, on or before each August, commencing
in 1995, a brief certificate from the principal executive officer
principal financial officer or principal accounting officer of the
Guarantor as to his or her knowledge of the Guarantor's compliance with
all conditions and covenants under the Indentures. For purposes of this
subsection (d), such compliance shall be determined without regard to
any period of grace or requirement of notice provided under the
Indentures.
CHEVRON CORPORATION, as Guarantor
Dated:___________________, 1994 By:______________________________
SCHEDULE 1
Defined Terms Used in the Assignment
"Assignment of Charter" means the assignment between the Owner and the
Lender, as amended from time to time in accordance with the terms thereof,
pursuant to which the Owner assigns to the Lender all of its right, title and
interest in, to and under the Initial Charter to secure its obligations under
the Loan Agreements.
"Assignment of Earnings and Insurances" means the assignment between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner assigns to the Lender all of its
right, title and interest in, to and under the freights and hires (as well as
any charters entered into after the Closing Date) with respect to the Vessel
to secure its obligations under the Loan Agreements.
"Assignment" or "Assignment of Guarantee" means the assignment between
the Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner assigns to the Lender all of its
right, title and interest in, to and under the Guarantee to secure its
obligations under the Loan Agreements.
"Assignment of Management Agreement" means the assignment between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner assigns to the Lender all of its
right, title and interest in, to and under the Management Agreement to secure
its obligations under the Loan Agreements.
"Assignment of Purchase Agreement" means the assignment between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner assigns to the Lender all of its
right, title and interest in, to and under the Purchase Agreement to secure
its obligations under the Loan Agreements.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in New York, New York, or in the city and state
where the Trustee's principal offices are located, are authorized or are
obligated by law, executive order or governmental decree to be closed.
"Closing Date" means __________ __, 1994.
"Collateral" means (i) an assignment of the Initial Charter, (ii) a
mortgage on the Vessel, (iii) an assignment of the earnings and insurances on
the Vessel, (iv) an assignment of the Guarantee, (v) an assignment of the
Management Agreement relating to the Vessel, (vi) an assignment of the
Purchase Agreement, (vii) the pledge of the shares of the Owner by Owner's
shareholder and (viii) a blanket security interest on all of the assets of the
Owner now existing or hereafter created, together with all income and proceeds
thereof.
"Commission" means the Securities and Exchange Commission.
"Exchange Act" means the United States Securities Exchange Act of 1934,
as amended.
"Event of Default" means an Event of Default under Section 6.01 of the
Loan Agreements.
"Governmental Approval" means any authorization, consent, approval,
license, franchise, lease, ruling, permit, tariff, rate, certification,
exemption, filing or registration by or with any Governmental Authority
relating to the ownership of the Collateral or to the execution, delivery or
performance of the Loan Agreement or any Security Document.
"Governmental Authority" means the federal government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any other governmental entity with authority over the Owner
or operation of the Vessels.
"Guarantor" means Chevron Corporation, a Delaware corporation.
"Guarantee" means the Guarantee, dated ____________ 1, 1994 from the
Guarantor.
"Indentures" means the Indenture, dated as of __________ 1, 1994 between
the Owner and the Trustee pursuant to which the Term Mortgage Notes will be
issued and the Indenture, dated as of __________ 1, 1994 between the Lender
and the Trustee pursuant to which the Serial Mortgage Notes will be issued.
"Initial Charter" means the Bareboat Charter, dated _________ 1, 1994
between the Initial Charterer and the Owner.
"Initial Charterer" means Chevron Transport Corporation, a Liberian
corporation.
"Issue of One Debenture" means each Issue of One Debenture between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner grants to the Lender a security
interest in all of its assets.
"Law" means any statute, law, rule, regulation, ordinance, order, code,
policy or rule of common law, now or hereafter in effect, and any judicial or
administrative interpretation thereof by a Governmental Authority or
otherwise, including any judicial or administrative order, consent decree or
judgment.
"Lender" means California Petroleum Transport Corporation, a corporation
organized under the laws of the State of Delaware.
"Loan Agreements" means, collectively, the Serial Loan Agreement and the
Term Loan Agreement.
"Loans" means, collectively, the Serial Loans and the Term Loan.
"Management Agreement" means the agreement, dated the Closing Date,
among the Owner, the Manager and the Technical Adviser.
"Manager" means the Person performing the duties of the Manager under the
Management Agreement, initially P.D. Gram & Co. ans.
"Mortgage" means, with respect to the Vessel, the first preferred ship
mortgages on the Vessel granted by the Owner to the Lender, as amended from
time to time in accordance with the terms of such Mortgage.
"Owner" means CalPetro Tankers (Bahamas I) Limited, a company organized
under the laws of The Commonwealth of the Bahamas.
"Payment Date" means each ________ and ______________ commencing
___________ 1995.
"Person" means an individual, a partnership, a corporation, a joint
venture, an unincorporated association, a joint-stock company, a trust, or
other entity or a government or any agency or political subdivision thereof.
"Purchase Agreement" means the Vessel Purchase Agreement, dated as of
_________________, between the Owner and the Initial Charterer wherein the
Owner purchases the Vessel from the Initial Charterer.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or partnership agreement or other organizational or
governing documents of such Person, and, any Law applicable to or binding upon
such Person or any of its properties or to which such Person or any of its
properties is subject.
"Securities" means, collectively, the Term Mortgage Notes and the Serial
Mortgage Notes.
"Security Documents" means the Term Loan Agreement, the Serial Loan
Agreement, the Mortgage, the Assignment of Charter, the Assignment of Earnings
and Insurances, the Assignment of Guarantee, the Assignment of Management
Agreement, the Assignment of Purchase Agreement, the Issue of One Debenture,
collectively.
"Serial Loan Agreement" the Loan Agreement, dated as of __________ 1,
1994 between the Lender and the Owner pursuant to which the Lender will make
the Serial Loan to the Owner.
"Serial Loans" shall have the meaning assigned to such term in the
Preliminary Statement of this Assignment.
"Serial Mortgage Notes" means the Serial First Preferred Term Mortgage
Notes which will mature serially from _____________, 1995 to _____________,
2005 in the initial aggregate amount of $168,500,000 issued by the Lender
concurrently with the issuance of the Term Mortgage Notes.
"Serial Obligations" means the payment, performance or obligations of
any kind or nature whatsoever of the Owner under and pursuant to the Serial
Loan Agreement, any Security Document and any instrument, agreement or
document referred to therein.
"State" means any state of the United States of America and, in
addition, the District of Columbia.
"Technical Adviser" means the person performing the duties of the
Technical Adviser under the Management Agreement, initially Barber Ship
Management Group.
"Term Loan" shall have the meaning assigned to such term in the
Preliminary Statement of this Assignment.
"Term Loan Agreement" means the Loan Agreement, dated as of __________
1, 1994 between the Owner and the Lender pursuant to which the Lender makes
the Term Loan to the Owner.
"Term Mortgage Notes" means __% First Preferred Mortgage Notes Due 2014
in the initial aggregate amount of $117,900,000 issued by the Lender
concurrently with the issuance of the Serial Mortgage Notes.
"Term Obligations" means the payment, performance or obligations of any
kind or nature whatsoever of the Owner under and pursuant to the Term Loan
Agreement, any Security Document and any instrument, agreement or document
referred to therein.
"Trustee" means Chemical Trust Company of California.
"Vessel" shall have the meaning assigned to such term in the Preliminary
Statement of this Assignment.
______________________________________________________________________________
______________________________________________________________________________
California Petroleum Transport Corporation
and
Chemical Trust Company of California
___________________________________
COLLATERAL ASSIGNMENT OF GUARANTEE
Dated as of __________ 1, 1994
___________________________________
______________________________________________________________________________
______________________________________________________________________________
Table of Contents
Page No.
ARTICLE I
DEFINITIONS
ARTICLE II
ASSIGNMENT
Section 2.01 Security Interest........................................ 1
Section 2.02 Assignment............................................... 1
Section 2.03 Issuer to Remain Liable.................................. 2
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE ISSUER
Section 3.01 Organization, Power and Status of the Issuer............. 2
Section 3.02 Authorization; Enforceability; Execution and Delivery.... 3
Section 3.03 No Conflicts; Laws and Consents; No Default.............. 3
Section 3.04 Governmental Approvals................................... 3
Section 3.05 Litigation............................................... 3
Section 3.06 No Prior Assignment...................................... 3
Section 3.07 The Assignment of Guarantee.............................. 4
ARTICLE IV
COVENANTS OF THE ISSUER
Section 4.01 Consent of Chevron and Owner............................. 4
Section 4.02 Enforcement of Assignment of Guarantee................... 4
Section 4.03 Amendment of Assignment of Guarantee; Collateral Assignment
of Guarantee............................................. 4
Section 4.04 Performance of Obligations............................... 5
Section 4.05 Notices.................................................. 5
Section 4.06 Further Assurances....................................... 5
Section 4.07 Collateral Trustee as Attorney-in-Fact of Issuer......... 5
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01 Amendment................................................ 5
Section 5.02 Severability............................................. 5
Section 5.03 Notices.................................................. 6
Section 5.04 Captions................................................. 6
Section 5.05 Governing Law............................................ 6
Section 5.06 No Partnership........................................... 6
Section 5.07 Counterparts............................................. 6
Section 5.08 Survival................................................. 6
Section 5.09 Integration.............................................. 6
Section 5.10 Reproduction of Documents................................ 7
Section 5.11 Successors and Assigns; Assignment....................... 7
Section 5.12 General Interpretive Principles.......................... 7
Section 5.13 Effective Date of Transaction............................ 7
Collateral Assignment of Guarantee, dated as of __________ 1, 1994
(the "Assignment"), between California Petroleum Transport Corporation, a
corporation organized under the laws of the State of Delaware (the "Issuer")
and Chemical Trust Company of California (the "Collateral Trustee").
PRELIMINARY STATEMENT
Issuer has authorized the issue of the Serial Mortgage Notes and
the Term Mortgage Notes (collectively, the "Notes"). The Notes will be issued
pursuant to the terms and conditions of the Indentures, each dated as of the
date hereof, each between the Issuer and the Collateral Trustee, as indenture
trustee. The net proceeds of the Notes will be used by the Issuer to make two
loans to CalPetro Tankers (Bahamas I) Limited (the "Owner") pursuant to the
Loan Agreements, which will be used by the Owner to acquire the m.t. _________
(the "Vessel") from Chevron Transport Corporation (the "Initial Charterer").
The Vessel will be bareboat chartered to the Initial Charterer pursuant to the
Bareboat Charter (the "Initial Charter"), dated as of the date hereof, between
the Owner and the Initial Charterer. As collateral security for its
obligations under the Indentures, the Issuer will assign, pledge, mortgage and
grant to the Collateral Trustee a security interest in, inter alia, all of the
Issuer's right, title and interest in and to the Guarantee (the "Guarantee")
dated _________, 1994, from Chevron Corporation ("Chevron") and the Assignment
of Guarantee.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and of other valuable consideration, receipt of
which is hereby acknowledged, the Collateral Trustee and the Issuer hereby
agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this Assignment shall have the meanings
assigned to such terms in Schedule 1 to this Assignment, and the definitions
of such terms shall be equally applicable to both the singular and plural
forms of such terms.
ARTICLE II
ASSIGNMENT
Section 2.01 Security Interest. This Assignment is made and
delivered as security for the Serial Obligations and the Term Obligations,
equally and ratably; provided, however, in the event that the Serial
Obligations are satisfied and paid in full pursuant to the terms and
conditions of the Serial Indenture, this Assignment will be security solely and
exclusively for the Term Obligations.
Section 2.02 Assignment. In order to provide for the payment of
and as security for the Serial Obligations and the Term Obligations, equally
and ratably, the Issuer has sold, assigned, transferred, set over and granted
a security interest and does hereby sell, assign, transfer, set over and grant
a security interest unto the Collateral Trustee, its successors and assigns,
for its and their respective successors' and assigns' own proper use and
benefit, all of the Issuer's right, title and interest in and to the Guarantee
and the Assignment of Guarantee, including without limitation any moneys
whatsoever payable to the Issuer under the Guarantee and the Assignment of
Guarantee, together with the income and proceeds thereof and all other rights
and benefits whatsoever accruing to the Issuer under the Guarantee and the
Assignment of Guarantee; provided, however, that the Issuer shall keep the
Collateral Trustee fully and effectively indemnified from and against all
actions, losses, claims, proceedings, costs, demands and liabilities which may
be suffered by the Collateral Trustee under or by virtue of the Guarantee, the
Assignment of Guarantee or this Assignment; provided further, however, in the
event that the Serial Obligations are satisfied and paid in full pursuant to
the terms and conditions of the Serial Indenture, the sale, assignment,
transfer and grant of security interest made by the Issuer pursuant to the
terms of this Assignment will be solely and exclusively for the benefit of the
Collateral Trustee as Collateral Trustee under the Term Indenture and this
Assignment will be security solely and exclusively for the Term Obligations.
Section 2.03 Issuer to Remain Liable. (a) Anything in this
Assignment contained to the contrary notwithstanding, the Issuer shall remain
liable under the Assignment of Guarantee, and shall observe, perform and
fulfill all of the conditions and obligations to be observed, performed and
fulfilled by it thereunder, and the Collateral Trustee shall have no
obligation or liability of any kind whatsoever thereunder or by reason of or
arising out of this Assignment, nor shall the Collateral Trustee be under any
liability whatsoever in the event of any failure by the Issuer to perform its
obligations thereunder or be required or obligated in any manner to observe,
perform or fulfill any of the conditions or obligations of the Issuer
thereunder or pursuant thereto, or to make any payment or to make any inquiry
as to the nature or sufficiency of any payment received by it or the Issuer
thereunder, or to present or file any claim, or to take any other action to
collect or enforce the payment of any amounts which may have been assigned to
the Collateral Trustee or to which the Collateral Trustee may be entitled
hereunder at any time or times.
(b) Any and all rights assigned herein may be further assigned by
the Collateral Trustee, including, without being limited to, assignments in
connection with the enforcement of the assignments made by this Assignment and
any subsequent holder of this Assignment shall succeed to and have all the
rights and powers of the Collateral Trustee under this Assignment.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE ISSUER
The Issuer hereby represents and warrants to the Collateral
Trustee as follows:
Section 3.01 Organization, Power and Status of the Issuer. The
Issuer (a) is a corporation duly formed, validly existing and in good standing
under the laws of the State of Delaware and (b) is duly authorized, to the
extent necessary, to do business in each jurisdiction where the character of
its properties or the nature of its activities makes such qualification
necessary. The Issuer has all requisite corporate power and authority to own
and operate the property it purports to own and to carry on its business as
now being conducted and as proposed to be conducted in respect of the Vessel.
Section 3.02 Authorization; Enforceability; Execution and Delivery.
(a) The Issuer has all necessary corporate power and authority to execute,
deliver and perform under this Assignment.
(b) All action on the part of the Issuer that is required for the
authorization, execution, delivery and performance of this Assignment has been
duly and effectively taken; and the execution, delivery and performance of
this Assignment does not require the approval or consent of any Person except
for such consents and approvals as have been obtained on or prior to the
Closing Date.
(c) This Assignment has been duly executed and delivered by the
Issuer. This Assignment constitutes the legal, valid and binding obligation
of the Issuer, enforceable against it in accordance with the terms thereof.
Section 3.03 No Conflicts; Laws and Consents; No Default. (a)
Neither the execution, delivery and performance of this Assignment nor the
consummation of any of the transactions contemplated hereby nor performance of
or compliance with the terms and conditions hereof (i) contravenes any
Requirement of Law applicable to the Issuer or (ii) constitutes a default
under any Security Document.
(b) The Issuer is in compliance with and not in default under any
and all Requirements of Law applicable to the Issuer and all terms and
provisions of this Assignment.
Section 3.04 Governmental Approvals. All Governmental Approvals
which are required to be obtained in the name of the Issuer in connection with
the execution, delivery and performance by the Issuer of this Assignment have
been obtained and are in effect on the Closing Date.
Section 3.05 Litigation. There are no actions, suits or
proceedings at law or in equity or by or before any Governmental Authority now
pending against the Issuer or, to the best of the Issuer's knowledge,
threatened against the Issuer or pending or threatened against any property or
other assets or rights of any of the Issuer with respect to this Assignment.
Section 3.06 No Prior Assignment. The Issuer has not assigned or
pledged, and hereby covenants that it will not assign or pledge, so long as
this Assignment shall remain in effect, the Guarantee, the Assignment of
Guarantee or any part of the rights, titles and interests hereby assigned, to
anyone other than the Collateral Trustee, or its successors or assigns.
Section 3.07 The Assignment of Guarantee. The Assignment of
Guarantee constitutes the legal, valid and binding obligation of the Issuer
and of the Issuer as "Lender" thereunder and is in full force and effect in
the form of Exhibit "A" attached hereto; there are no amendments, additions,
addenda or modifications thereto; said Exhibit "A" represents the entirety of
the chartering and other arrangements referred to therein; and neither of the
parties thereto is in default thereunder.
ARTICLE IV
COVENANTS OF THE ISSUER
The Issuer hereby covenants and agrees that so long as any of the
Serial Mortgage Notes or Term Mortgage Notes remains outstanding:
Section 4.01 Consent of Chevron and Owner. On the Closing Date,
the Issuer shall deliver to Chevron and the Owner a copy of this Assignment
and shall procure the execution by Chevron and the Owner of the Consents and
Acknowledgment set out in Exhibits A-1 and A-2 hereto and deliver said
Consents and Acknowledgment to the Collateral Trustee on the Closing Date.
Section 4.02 Enforcement of Assignment of Guarantee. (a) The
Issuer will do or permit to be done each and every act or thing which the
Collateral Trustee may from time to time require to be done for the purpose of
enforcing the Collateral Trustee's rights under the Guarantee, the Assignment
of Guarantee and this Assignment.
(b) If an Event of Default shall occur under either the Term
Indenture or the Serial Indenture, the Issuer shall procure that all moneys
hereby assigned or agreed to be assigned or arising from or in connection with
any of the rights, title, interest and benefits of the Issuer under the
Guarantee and the Assignment of Guarantee shall be paid to the credit of
Account No. _____________ of the Collateral Trustee at Chemical Trust Company
of California, or to such other account as the Collateral Trustee may from
time to time direct.
(c) The Issuer will not exercise any right or powers conferred
on it by the Assignment of Guarantee in connection with any default or alleged
default by Chevron or the Owner thereunder or under the Guarantee (including
without limitation the right of termination and substitution) unless and until
requested so to do by the Collateral Trustee whereupon the Issuer agrees that
it will do so provided always that the Collateral Trustee shall not be
responsible in any way whatsoever in the event that the exercise of any right
or power (including the right of termination and substitution) be thereafter
adjudged improper or to constitute a repudiation of the Assignment of
Guarantee by the Issuer.
Section 4.03 Amendment of Assignment of Guarantee; Collateral
Assignment of Guarantee. (a) The Issuer will not, except with the previous
written consent of the Collateral Trustee, agree to any variation of the
Guarantee or the Assignment of Guarantee or release Chevron or the Owner from
any of its obligations thereunder or waive any breach of Chevron or the
Owner's obligations thereunder or consent to any such act or omission of
Chevron or the Owner as would otherwise constitute such breach.
(b) The Issuer will not, except with the previous written consent
of the Collateral Trustee, assign the Guarantee or Assignment of Guarantee to
any other Person.
Section 4.04 Performance of Obligations. The Issuer will perform
its obligations under the Assignment of Guarantee and use its best endeavors
to procure that the Owner shall perform its obligations under the Assignment
of Guarantee.
Section 4.05 Notices. The Issuer will send a copy of all notices
received or given by it under the Assignment of Guarantee forthwith to the
Collateral Trustee.
Section 4.06 Further Assurances. The Issuer will at any time and
from time to time, upon the written request of the Collateral Trustee,
promptly and duly execute and deliver any and all such further instruments and
documents and take such action as the Collateral Trustee may deem desirable in
order to obtain the full benefits of this Assignment and of the rights and
powers herein granted.
Section 4.07 Collateral Trustee as Attorney-in-Fact of Issuer. The
Issuer hereby constitutes the Collateral Trustee, and its successors and
assigns, its true and lawful attorney-in-fact, irrevocably, with full power in
its own name, in the name of its agents or nominees or in the name of its
agents or nominees or in the name of the Issuer or otherwise, to ask, require,
demand, receive, enforce and give acquittance for, any and all moneys and
claims for moneys due and to become due and payable under or arising out of
the Guarantee or the Assignment of Guarantee, to endorse any checks or other
instruments or orders in connection therewith and to file any claims or take
any action or institute any proceedings which to the Collateral Trustee may
seem to be necessary or advisable under this Assignment. Any action or
proceeding brought by the Collateral Trustee pursuant to any of the provisions
of this Assignment or otherwise and any claim made by the Collateral Trustee
hereunder may be compromised, withdrawn or otherwise dealt with by the
Collateral Trustee without any notice to or approval of the Issuer.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01 Amendment. This Assignment may be amended from time
to time by written agreement signed by the parties hereto.
Section 5.02 Severability. If any provision of this Assignment is
held to be in conflict with any applicable statute or rule of law or is
otherwise held to be unenforceable for any reason whatsoever, such
circumstances shall not have the effect of rendering the provision in question
inoperative or unenforceable in any other case or circumstance, or of
rendering any other provision or provisions herein contained invalid,
inoperative, or unenforceable to any extent whatsoever. The invalidity of any
one or more phrases, sentences, clauses or Sections of this Assignment
contained, shall not affect the remaining portions of this Assignment, or any
part thereof.
Section 5.03 Notices. All demands, notices and communications
hereunder shall be in writing, personally delivered or mailed by certified
mail-return receipt requested, and shall be deemed to have been duly given
upon receipt (a) in the case of the Collateral Trustee, at the following
address: c/o JH Management Corporation, Room 6/9, One International Place,
Boston Massachusetts 02110-2624, (b) in the case of the Issuer, at the
following address: United House, 14-16 Nelson Street, Douglas, Isle of Man, or
at other such address as shall be designated by such party in a written notice
to the other parties.
Section 5.04 Captions. The captions or headings in this Assignment
are for convenience only and in no way define, limit or describe the scope or
intent of any provisions or sections of this Assignment.
Section 5.05 Governing Law. This Assignment shall be governed by
and interpreted in accordance with the laws of the State of New York, without
giving effect to the principles of conflicts of law.
Section 5.06 No Partnership. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture among the parties
hereto and the services of each party shall be rendered as an independent
contractor and not as agent for any other party.
Section 5.07 Counterparts. This Assignment may be executed in any
number of counterparts and by different parties hereto on separate
counterpart, each of which shall be deemed to be an original. Such
counterparts shall constitute one and the same agreement.
Section 5.08 Survival. The representations, covenants and
agreements contained in or made pursuant to this Assignment in respect of
either party hereto shall survive the execution and delivery of this
Assignment and shall continue in effect so long as such party's obligations
hereunder remain outstanding.
Section 5.09 Integration. This Assignment and the Schedule and
Exhibits hereto constitute the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements, understandings or representations pertaining to the subject
matter hereof, whether oral or written. There are no warranties,
representations or other agreements between the parties in connection with the
subject matter hereof except as specifically set forth or incorporated herein.
Section 5.10 Reproduction of Documents. This Assignment and all
documents relating thereto, including, without limitation, (a) consents,
waivers and modifications which may hereafter be executed, (b) documents
received by any party at the closing, and (c) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made in the regular course
of business) and that any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence.
Section 5.11 Successors and Assigns; Assignment. This Assignment
shall be binding upon and inure to the benefit of the Issuer and the
Collateral Trustee and their respective successors and assigns. Neither the
Issuer nor the Collateral Trustee shall have the right to assign its rights
hereunder or any interest herein without the prior written consent of the
other party.
Section 5.12 General Interpretive Principles. For purposes of this
Assignment except as otherwise expressly provided or unless the context
otherwise requires:
(a) the defined terms in this Assignment shall include the
plural as well as the singular, and the use of any gender herein shall be
deemed to include any other gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles as in effect on the date hereof;
(c) references herein to "Articles", "Sections", "Subsections",
"paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, paragraphs and other subdivisions
of this Assignment;
(d) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to paragraphs and
other subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Assignment as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
Section 5.13 Effective Date of Transaction. Notwithstanding and
the fact that this Assignment is dated as of __________ 1, 1994, the
transactions set forth herein shall not be effective until the Closing Date.
IN WITNESS WHEREOF, the Issuer and the Collateral Trustee have
caused this Assignment to be duly executed and delivered by their respective
officers thereunto duly authorized all as of the day and year first above
written.
CALIFORNIA PETROLEUM TRANSPORT
CORPORATION, as Collateral Trustee
By: _______________________________
Name: _______________________________
Title:_______________________________
CHEMICAL TRUST COMPANY OF CALIFORNIA, as Issuer
By: _______________________________
Name: _______________________________
Title:_______________________________
Exhibit A-1
LETTER OF ACKNOWLEDGEMENT
TO COLLATERAL ASSIGNMENT OF GUARANTEE
__________ __, 1994
CHEMICAL TRUST COMPANY OF
CALIFORNIA, as Collateral Trustee
Dear Sirs:
The undersigned hereby consents to and acknowledges receipt of a
signed copy of the Collateral Assignment of Guarantee (the "Assignment"),
dated as of __________ 1, 1994, between California Petroleum Transport
Corporation (the "Issuer") and yourselves as adequate notice of such
assignment to you of the Assignment of Guarantee (as defined in the Assignment)
and of all the right, title and interest of the Issuer in, to and under the
Assignment of Guarantee.
So long as the Assignment remains effective, we hereby agree that,
upon your notification to us of the occurrence of an Event of Default under
the Term Indenture or Serial Indenture referred to in the Assignment, we shall
pay any and all sums which we are legally obligated to pay to the Issuer or
otherwise as stated in and according to the Assignment of Guarantee directly
to your Account No. ________________, at ______________, or otherwise to such
other account as you may at any time or from time to time, designate by notice
to us in writing.
Payments of moneys under the Assignment of Guarantee may be
adjusted, reduced or withheld only as expressly provided therein. Payments to
you shall not be subject to any right of set-off or defense by way of
counterclaim or otherwise which the undersigned may have against the Issuer or
any entity substituted for it other than under the Assignment of Guarantee and
all payments once made to you will be final, and once paid we will not, for
any reason whatsoever, seek to recover any such payment made to you by virtue
of the Assignment or this Letter of Consent.
We confirm that the terms of the Guarantee (as defined in the
Assignment) remain in full force and effect and constitute the entire
agreement between the parties thereto with respect to the Guarantee and that
the undersigned is not presently in breach of the terms of the Assignment of
Guarantee. We further confirm that the terms of the Guarantee have not been
varied or modified and that the terms of the Guarantee will not after the date
hereof be varied or modified without your prior written consent.
We confirm that we have received no prior notice of any assignment
by the Issuer of any interest in the Assignment of Guarantee.
The undersigned will not permit any amendment, modification,
cancellation or other alteration in the Guarantee.
CALPETRO TANKERS (BAHAMAS I) LIMITED, as Owner
By: _______________________________
Name: _______________________________
Title:_______________________________
Exhibit A-2
LETTER OF ACKNOWLEDGMENT
TO COLLATERAL ASSIGNMENT OF GUARANTEE
Chemical Trust Company of California,
as Collateral Trustee
California Petroleum Transport Corporation,
as Lender
Dear Sirs:
Chevron Corporation (the "Guarantor") hereby acknowledges notice
of and consents to the terms of (i) the Assignment of Guarantee (the
"Assignment") dated the ___ day of __________, 1994 and made between Calpetro
Tankers (Bahamas I) Limited (the "Owner") and California Petroleum Transport
Corporation (the "Lender") as adequate notice of such assignment to the Lender
of the Guarantee (as defined in the Assignment) and of all the right, title
and interest of the Owner in, to and under the Guarantee and (ii) the
Collateral Assignment of Guarantee (the "Collateral Assignment") dated the
______ day of ___________, 1994 and made by and between the Lender and
Chemical Trust Company of California (the "Collateral Trustee") as adequate
notice of the further assignment of the Guarantee and all of the right, title
and interest of the Lender in, to and under the Guarantee. Any capitalized
term not otherwise defined herein shall have the meaning assigned to such term
in the Assignment.
The Guarantor confirms that it (a) has reviewed the terms of the
Charter and (b) understands the rights and obligations of Chevron Transport
Corporation (the "Charterer") pursuant to the terms and conditions thereof.
Notwithstanding anything to the contrary contained in the
Guarantee including without limitation the Guarantor's right to terminate the
Guarantee as provided therein, so long as the Charter, the Assignment and the
Collateral Assignment are each in effect and the Collateral Trustee has rights
in the Charter and the Guarantee, the Guarantor hereby agrees the Guarantee
will continue in full force and effect and that, upon notification to the
Guarantor of the occurrence of an Event of Default under the Indenture
referred to in the Assignment, the Guarantor shall (i) perform any and all
obligations which the Guarantor is obligated to perform according to the
Guarantee and (ii) pay any and all sums which the Guarantor is obligated to pay
according to the Guarantee, as modified by the terms of this Letter of
Consent, directly to the Collateral Trustee at Account No. ________________,
at ______________, or otherwise to such other account as the Collateral
Trustee may at any time or from time to time, designate by notice to the
Guarantor in writing.
Payments to the Collateral Trustee shall not be subject to any
right of set-off or defense by way of counterclaim or otherwise which the
Guarantor may have against the Owner or any entity substituted for it and all
payments once made to the Collateral Trustee will be final, and once paid the
Guarantor will not, for any reason whatsoever, seek to recover any such
payment made to the Lender by virtue of the Assignment or this Letter of
Consent.
The Guarantor confirms to the Lender and the Collateral Trustee
that (a) the Guarantor is a corporation duly organized and existing in good
standing under the laws of the State of Delaware, (b) the making and
performance of this Letter of Consent in accordance with its terms have been
duly authorized by all necessary corporate action on the part of the
Guarantor, do not contravene the Guarantor's Certificate of Incorporation or
any indenture, credit agreement or other contractual agreement to which the
Guarantor is a party or by which it is bound or any law binding on the
Guarantor, (c) the making and performance of the Guarantee in accordance with
its terms have been duly authorized by all necessary corporate action on the
part of the Guarantor, do not require any stockholder approval, do not
contravene the Guarantor's Certificate of Incorporation or any indenture,
credit agreement or other contractual agreement to which the Guarantor is a
party or by which it is bound, and do not, as to the making thereof,
contravene any law binding on the Guarantor and, to the best knowledge of the
Guarantor do not, as to the performance thereof, contravene any law binding on
the Guarantor, (d) the Guarantee constituted as of the date thereof and at all
times thereafter, to and including the date of this Letter of Consent, a
binding obligation of the Guarantor enforceable against the Guarantor in
accordance with its terms, and this Letter of Consent is a binding obligation
of the Guarantor enforceable against the Guarantor in accordance with its
terms, (e) the terms of the Guarantee remain in full force and effect and
constitutes, as modified by this Letter of Consent, the entire agreement
between the parties thereto, (f) the terms of the Guarantee have not been
varied or modified, other than pursuant to the terms of this Letter of
Consent, and that the terms of the Guarantee will not after the date hereof be
varied or modified without the prior written consent of the Collateral Trustee
and (g) the Guarantor has received no prior notice of any assignment by the
Owner of any interest in the Guarantee.
The Guarantor covenants:
(a) to file with the Trustee, within 15 days after the Guarantor
is required to file the same with the Commission, copies of the annual
reports and of the information, documents, and other reports (or copies
of such portions of any of the foregoing as the Commission may from time
to time by rules and regulations prescribe) which the Guarantor may be
required to file with the Commission pursuant to Section 13 or 15(d) of
the Exchange Act, or, if the Guarantor is not required to file
information, documents, or reports pursuant to either of such Sections
of the Exchange Act, then to file with the Trustee and the Commission,
in accordance with rules and regulations prescribed from time to time by
the Commission, such of the supplementary and period information,
documents, and reports which may be required pursuant to Section 13 of
the Exchange Act, or, in respect of a security listed and registered on
a national securities exchange, as may be prescribed from time to time
in such rules and regulations;
(b) to file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional information, documents, and reports with
respect to compliance by the Guarantor with the conditions and covenants
provided for in the Indentures as may be required from time to time by
such rules and regulations;
(c) to transmit to the holders of the Securities in the manner
and to the extent required by Section 313(c) of the Trust Indenture Act,
within 30 days after the filing thereof with the Trustee, such summaries
of any information, documents and reports required to be filed by the
Guarantor pursuant to subsections (a) and (b) of this Letter of Consent
as may be required by rules and regulations prescribed from time to time
by the Commission; and
(d) furnish to the Trustee, on or before each August, commencing
in 1995, a brief certificate from the principal executive officer
principal financial officer or principal accounting officer of the
Guarantor as to his or her knowledge of the Guarantor's compliance with
all conditions and covenants under the Indentures. For purposes of this
subsection (d), such compliance shall be determined without regard to
any period of grace or requirement of notice provided under the
Indentures.
CHEVRON CORPORATION, as Guarantor
Dated:___________________, 1994 By:_______________________________
SCHEDULE 1
Defined Terms Used in the Assignment
"Assignment of Charter" means the assignment between the Issuer and the
Owner, as amended from time to time in accordance with the terms thereof,
pursuant to which the Owner assigns to the Issuer all of its right, title and
interest in, to and under the Initial Charter to secure its obligations under
the Loan Agreements.
"Assignment of Mortgage" means between the Issuer and the Collateral
Trustee, as amended from time to time in accordance with the terms thereof
pursuant to which the Issuer assigns to the Collateral Trustee all of its
right, title and interest in, to and under the Mortgage to secure its
obligations under the Indenture.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in New York, New York, or in the city and state
where the Trustee's principal offices are located, are authorized or are
obligated by law, executive order or governmental decree to be closed.
"Chevron" means Chevron Corporation, a Delaware corporation.
"Closing Date" means __________ __, 1994.
"Collateral Assignment of Charter" means the assignment between the
Issuer and the Collateral Trustee, as amended from time to time in accordance
with the terms thereof, pursuant to which the Issuer assigns to the Collateral
Trustee all of its right, title and interest in, to and under the Assignment
of Charter to secure its obligations under the Indentures.
"Collateral Assignment of Guarantee" means the assignment between the
Issuer and the Collateral Trustee, as amended from time to time in accordance
with the terms thereof, pursuant to which the Issuer assigns to the Collateral
Trustee all of its right, title and interest in, to and under the Assignment
of Guarantee to secure its obligations under the Indentures.
"Collateral Trustee" means Chemical Trust Company of California.
"Event of Default" means an Event of Default under Section 4.01 of the
Indentures.
"Governmental Approval" means any authorization, consent, approval,
license, franchise, lease, ruling, permit, tariff, rate, certification,
exemption, filing or registration by or with any Governmental Authority
relating to the ownership of the Collateral or to the execution, delivery or
performance of any Security Document.
"Governmental Authority" means the federal government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any other governmental entity with authority over the Issuer
or operation of the Vessels.
"Guarantee" means the guarantee of the obligations of the Initial
Charterer under the Initial Charter given by Chevron.
"Indentures" means the Indenture, dated as of __________ 1, 1994 between
the Issuer and the Collateral Trustee pursuant to which the Term Mortgage
Notes will be issued and the Indenture, dated as of __________ 1, 1994 between
the Collateral Trustee and the Issuer pursuant to which the Serial Mortgage
Notes will be issued.
"Initial Charter" means with respect to each Vessel, the Bareboat
Charter, dated _________, between the Initial Charterer and the Owner.
"Initial Charterer" means Chevron Transport Corporation, a Liberian
corporation.
"Issuer" means California Petroleum Transport Corporation, a corporation
organized under the laws of the State of Delaware.
"Law" means any statute, law, rule, regulation, ordinance, order, code,
policy or rule of common law, now or hereafter in effect, and any judicial or
administrative interpretation thereof by a Governmental Authority or
otherwise, including any judicial or administrative order, consent decree or
judgment.
"Mortgage" means, with respect to the Vessel, the first preferred ship
mortgages on the Vessel granted by the Owner to the Issuer, as amended from
time to time in accordance with the terms of such Mortgage.
"Owner" means CalPetro Tankers (Bahamas I) Limited, a company organized
under the laws of The Commonwealth of the Bahamas.
"Person" means an individual, a partnership, a corporation, a joint
venture, an unincorporated association, a joint-stock company, a trust, or
other entity or a government or any agency or political subdivision thereof.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or partnership agreement or other organizational or
governing documents of such Person, and, any Law applicable to or binding upon
such Person or any of its properties or to which such Person or any of its
properties is subject.
"Security Documents" means the Collateral Trust Agreement, Collateral
Assignment of Charter, the Collateral Assignment of Guarantee and the
Assignment of Mortgage, collectively.
"Serial Indenture" the Indenture, dated as of __________ 1, 1994 between
the Issuer and the Trustee pursuant to which the Issuer issues the Serial
Mortgage Notes.
"Serial Mortgage Notes" means the Serial First Preferred Term Mortgage
Notes which will mature serially from _____________, 1995 to _____________,
2005 in the initial aggregate amount of $168,500,000 issued by the Issuer
concurrently with the issuance of the Term Mortgage Notes.
"Serial Obligations" means the payment, performance or obligations of
any kind or nature whatsoever of the Issuer under and pursuant to the Serial
Indenture, any Security Document and any instrument, agreement or document
referred to therein.
"State" means any state of the United States of America and, in
addition, the District of Columbia.
"Term Indenture" means the Indenture, dated as of __________ 1, 1994
between the Issuer and the Trustee pursuant to which the Issuer issues the
Term Mortgage.
"Term Mortgage Notes" means __% First Preferred Mortgage Notes Due 2014
in the initial aggregate amount of $117,900,000 issued by the Issuer
concurrently with the issuance of the Serial Mortgage Notes.
"Term Obligations" means the payment, performance or obligations of any
kind or nature whatsoever of the Issuer under and pursuant to the Term
Indenture, any Security Document and any instrument, agreement or document
referred to therein.
"Trustee" means Chemical Trust Company of California.
"Vessel" shall have the meaning assigned to such term in the Preliminary
Statement of this Assignment.
______________________________________________________________________________
______________________________________________________________________________
California Petroleum Transport Corporation
and
CalPetro Tankers (Bahamas I) Limited
___________________________________
ASSIGNMENT OF EARNINGS AND INSURANCES
Dated as of _______ 1, 1994
___________________________________
______________________________________________________________________________
______________________________________________________________________________
Table of Contents
Page No.
ARTICLE I
DEFINITIONS
ARTICLE II
ASSIGNMENT
Section 2.01 Security Interest........................................ 1
Section 2.02 Assignment of Earnings................................... 1
Section 2.03 Assignment of Insurances................................. 2
Section 2.04 Assignment of Proceeds of Requisition of Use............. 3
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE OWNER
Section 3.01 Organization, Power and Status of the Owner.............. 3
Section 3.02 Authorization; Enforceability; Execution and Delivery.... 3
Section 3.03 No Conflicts; Laws and Consents; No Default.............. 3
Section 3.04 Governmental Approvals................................... 4
Section 3.05 Litigation............................................... 4
Section 3.06 No Prior Assignment...................................... 4
ARTICLE IV
COVENANTS OF THE OWNER
Section 4.01 Covenants of Owner....................................... 4
Section 4.02 Owner to Remain Liable................................... 5
Section 4.03 Further Assurances....................................... 5
Section 4.04 Lender as Attorney-in-Fact of Owner...................... 5
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01 Amendment................................................ 5
Section 5.02 Severability............................................. 6
Section 5.03 Notices.................................................. 6
Section 5.04 Consent to Jurisdiction.................................. 6
Section 5.05 Captions................................................. 6
Section 5.06 Governing Law............................................ 6
Section 5.07 No Partnership........................................... 6
Section 5.08 Counterparts............................................. 7
Section 5.09 Survival................................................. 7
Section 5.10 Integration.............................................. 7
Section 5.11 Reproduction of Documents................................ 7
Section 5.12 Successors and Assigns; Assignment....................... 7
Section 5.13 General Interpretive Principles.......................... 7
Section 5.14 Effective Date of Transaction............................ 8
Assignment of Earnings and Insurances, dated as of _______ 1, 1994
(the "Assignment"), between California Petroleum Transport Corporation, a
corporation organized under the laws of the State of Delaware (the "Lender")
and CalPetro Tankers (Bahamas I) Limited, a company organized under the laws
of The Commonwealth of the Bahamas (the "Owner").
PRELIMINARY STATEMENT
The Owner has requested that the Lender make two loans to the
Owner: one loan in the aggregate principal amount equal to $____________ (the
"Term Loan") and one series of loans in the aggregate principal amount equal
to $____________ (collectively, the "Serial Loans" and, collectively with the
Term Loan, the "Loans"). The Loans will be made pursuant to the terms and
conditions of two Loan Agreements, each dated as of the date hereof, each
between the Lender and the Owner. The net proceeds of the Serial Loans and
the Term Loan will be used by the Owner to acquire the m.t. _________ (the
"Vessel") from Chevron Transport Corporation (the "Initial Charterer"). The
Vessel will be bareboat chartered to the Initial Charterer pursuant to the
Bareboat Charter (the "Initial Charter"), dated as of the date hereof, between
the Owner and the Initial Charterer. As collateral security for its
obligations under the Loan Agreements, the Owner will assign, pledge, mortgage
and grant the Lender a security interest in, inter alia, the Vessel, the
Initial Charter and the earnings and insurances of the Vessel.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and of other valuable consideration, receipt of
which is hereby acknowledged, the Owner and the Lender hereby agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this Assignment shall have the meanings
assigned to such terms in Schedule 1 to this Assignment, and the definitions
of such terms shall be equally applicable to both the singular and plural
forms of such terms.
ARTICLE II
ASSIGNMENT
Section 2.01 Security Interest. This Assignment is made and
delivered as security for the Serial Obligations and the Term Obligations,
equally and ratably; provided, however, in the event that the Serial
Obligations are satisfied and paid in full pursuant to the terms and
conditions of the Serial Loan Agreement, this Assignment will be security
solely and exclusively for the Term Obligations.
Section 2.02 Assignment of Earnings. The Owner, to provide for the
payment of and as security for the Term Obligations and the Serial
Obligations, equally and ratably, has sold, assigned, transferred, set over
and granted a security interest in and does hereby sell, assign, transfer, set
over unto and grant a security interest unto the Lender, its successors and
assigns, for its and their successors' and assigns' own proper use and
benefit, all of the Owner's right, title and interest in and to (a) any and
all moneys due and to become due to the Owner under any and all present and
future charter parties, bills of lading, contracts and other engagements of
affreightment or for the carriage or transportation of cargo, salvage and
other operations of every kind whatsoever of the Vessel; and (b) any and all
claims and causes of action for money, loss or damages that may accrue arising
out of or in any way connected with the present or future use, operation or
management of the Vessel (including proceeds of insurance against requisition
for or other loss of hire or use of the Vessel) or arising out of or in any way
connected with any and all such present and future charter parties, bills of
lading, contracts and other engagements of affreightment or for the carriage
or transportation of cargo, salvage and other operations of the Vessel and any
and all guaranties with respect to any of the foregoing, together with the
income and proceeds of any and all of the foregoing (all such right, title and
interest herein called the "Freights"); provided, however, in the event that
the Serial Obligations are satisfied and paid in full pursuant to the terms
and conditions of the Serial Loan Agreement, this Assignment will be security
solely and exclusively for the Term Obligations.
Section 2.03 Assignment of Insurances. In addition to the
foregoing, the Owner, as security for the Serial Obligations and the Term
Obligations, equally and ratably, has sold, assigned, transferred and set
over, and does hereby sell, assign, transfer, and set over unto the Lender,
its successors and assigns, for its and their successors' and assigns' own
proper use and benefit, all of the Owner's right, title and interest in and to
(a) all moneys and claims for moneys due and to become due to the Owner with
respect to the actual, constructive, agreed, arranged or compromised total
loss, or requisition for title, seizure, condemnation, confiscation,
sequestration or compulsory acquisition or otherwise of ownership (but not
including proceeds of insurance against requisition for or other loss of hire
or use of the Vessel) by act of any country or any governmental authority or
otherwise, of the Vessel, and all claims for damages or compensation with
respect thereto, and (b) all policies and contracts of insurance of whatsoever
nature and all entries with protection and indemnity clubs or societies (to
the extent that the rules of the relevant club or society allow such
assignment) that have been or may hereafter during the subsistence of this
Assignment be taken out in respect of the Owner's interests in the Vessel,
including all machinery, materials, equipment, appurtenances and outfits
thereon, including without being limited to hull and machinery, off hire, war
risks, protection and indemnity and title requisition or otherwise howsoever
and all the benefits thereof, including all claims of whatsoever nature and
return of premiums, together with the income and proceeds of any and all of
the foregoing (all such right, title and interest herein called the
"Insurances"); provided, however, in the event that the Serial Obligations are
satisfied and paid in full pursuant to the terms and conditions of the Serial
Loan Agreement, this Assignment will be security solely and exclusively for
the Term Obligations. The foregoing assignment is in addition to, and not in
substitution for, the provisions with respect to insurance on the Vessel
contained in the Mortgage.
Section 2.04 Assignment of Proceeds of Requisition of Use. The
Owner, as security for the Serial Obligations and the Term Obligations,
equally and ratably, hereby assigns, transfers, pledges and sets over to the
Lender, its successors and assigns, and grants thereto a security interest in,
all of the Owner's right, title and interest to and in all charter hire and
compensation resulting from a requisition of use arising during the
continuance of this security, together with the income and proceeds of any and
all of the foregoing; provided, however, in the event that the Serial
Obligations are satisfied and paid in full pursuant to the terms and conditions
of the Serial Loan Agreement, this Assignment will be security solely and
exclusively for the Term Obligations. If, as a result of such requisition,
the requisitioner shall pay or become liable to pay any amount by reason of
the loss of or injury to or depreciation of the Vessel, any such amount is
hereby made payable to the Lender.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE OWNER
The Owner hereby represents and warrants to the Lender as follows:
Section 3.01 Organization, Power and Status of the Owner. The
Owner (a) is a corporation duly formed, validly existing and in good standing
under the laws of The Commonwealth of the Bahamas and (b) is duly authorized,
to the extent necessary, to do business in each jurisdiction where the
character of its properties or the nature of its activities makes such
qualification necessary. The Owner has all requisite corporate power and
authority to own and operate the property it purports to own and to carry on
its business as now being conducted and as proposed to be conducted in respect
of the Vessel.
Section 3.02 Authorization; Enforceability; Execution and Delivery.
(a) The Owner has all necessary corporate power and authority to execute,
deliver and perform under this Assignment.
(b) All action on the part of the Owner that is required for the
authorization, execution, delivery and performance of this Assignment has been
duly and effectively taken; and the execution, delivery and performance of
this Assignment does not require the approval or consent of any Person except
for such consents and approvals as have been obtained on or prior to the
Closing Date.
(c) This Assignment has been duly executed and delivered by the
Owner. This Assignment constitutes the legal, valid and binding obligation of
the Owner, enforceable against it in accordance with the terms thereof.
Section 3.03 No Conflicts; Laws and Consents; No Default. (a)
Neither the execution, delivery and performance of this Assignment nor the
consummation of any of the transactions contemplated hereby nor performance of
or compliance with the terms and conditions hereof (i) contravenes any
Requirement of Law applicable to the Owner or (ii) constitutes a default under
any Security Document.
(b) The Owner is in compliance with and not in default under any
and all Requirements of Law applicable to the Owner and all terms and
provisions of this Assignment.
Section 3.04 Governmental Approvals. All Governmental Approvals
which are required to be obtained in the name of the Owner in connection with
the execution, delivery and performance by the Owner of this Assignment have
been obtained and are in effect on the Closing Date.
Section 3.05 Litigation. There are no actions, suits or
proceedings at law or in equity or by or before any Governmental Authority now
pending against the Owner or, to the best of the Owner's knowledge, threatened
against the Owner or pending or threatened against any property or other
assets or rights of the Owner with respect to this Assignment.
Section 3.06 No Prior Assignment. The Owner has not assigned or
pledged, and hereby covenants that it will not assign or pledge, so long as
this Assignment shall remain in effect, the Initial Charter or any part of the
rights, titles and interests hereby assigned, to anyone other than the Lender,
or its successors or assigns.
ARTICLE IV
COVENANTS OF THE OWNER
Section 4.01 Covenants of Owner. (a) The Owner covenants (i) that
it shall forthwith give, or cause its broker to give, in the form attached as
Appendix I hereto, notice of this Assignment to all insurers, underwriters,
clubs and associations, with respect to all that is assigned pursuant to the
terms hereof and it shall cause its interest in all Insurances and moneys
hereby assigned to be paid over promptly to the Lender or as it may direct and
that it shall cause its interest in all policies of insurance on the Vessel to
be assigned to the Lender or as it may direct; provided, however, that so long
as the Initial Charter is in effect, the notices may be in the form set forth
in the Initial Charter, (ii) that it shall cause all moneys and Freights hereby
assigned to be paid over promptly to the Lender or as it may direct and that
it shall (A) deliver to any charterer (other than the Initial Charterer) a
Notice in the form annexed hereto as Appendix II and (B) cause any charterer
to execute and deliver to the Lender a Consent in the form annexed hereto as
Appendix III or in such other form as agreed to by the Lender and (iii) that
it shall promptly execute and deliver to the Lender such documents, if any,
and shall do and perform such acts, if any, as in the opinion of counsel for
the Lender may be necessary or useful to facilitate or expedite the collection
by the Lender of such claims arising out of any requisition of use.
(b) All moneys and Freights and Insurances received by the
Lender under this Assignment shall be treated and applied as provided in the
Loan Agreement and Mortgage, respectively.
Section 4.02 Owner to Remain Liable. Anything in this Assignment
contained to the contrary notwithstanding, the Owner shall remain liable under
any existing charters, and any future charter parties, bills of lading,
contracts and other engagements of affreightment or other carriage or
transportation of cargo and other operations of every kind whatsoever of the
Vessel and any such policies of insurance, and shall observe, perform and
fulfill all of the conditions and obligations to be observed, performed and
fulfilled by them thereunder, and the Lender shall have no obligation or
liability thereunder or by reason of or arising out of this Assignment, nor
shall the Lender be required or obligated in any manner to observe, perform or
fulfill any of the conditions or obligations of the Owner thereunder or
pursuant thereto, or to make any payment or to make any inquiry as to the
nature or sufficiency of any payment or to make any inquiry as to the nature
or sufficiency of any payment received by the Owner, or to present or file any
claim, or to take any other action to collect or enforce the payment of any
amounts which may have been assigned to the Lender or to which the Lender may
be entitled hereunder at any time or times. The obligations of the Owner
under any policies of insurance may (at the sole election of the Lender) be
performed by the Lender or its nominee, without releasing the Owner therefrom,
but the Lender or its nominee shall be under no duty whatsoever to perform or
incur any such obligations.
Section 4.03 Further Assurances. The Owner will at any time and
from time to time, upon the written request of the Lender, promptly and duly
execute and deliver any and all such further instruments and documents and
take such action as the Lender may deem desirable in order to obtain the full
benefits of this Assignment and of the rights and powers herein granted.
Section 4.04 Lender as Attorney-in-Fact of Owner. The Owner hereby
constitutes the Lender, and its successors and assigns, its true and lawful
attorney-in-fact, irrevocably, with full power in its own name, in the name of
its agents or nominees or in the name of the Owner or otherwise, to ask,
require, demand, receive, enforce and give acquittance for, any and all moneys
and claims for moneys due and to become due and payable under or arising out
of the Initial Charter, to endorse any checks or other instruments or orders
in connection therewith and to file any claims or take any action or institute
any proceedings which to the Lender may seem to be necessary or advisable
under this Assignment. Any action or proceeding brought by the Lender
pursuant to any of the provisions of this Assignment or otherwise and any
claim made by the Lender hereunder may be compromised, withdrawn or otherwise
dealt with by the Lender without any notice to or approval of the Owner.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01 Amendment. This Assignment may be amended from time
to time by written agreement signed by the parties hereto.
Section 5.02 Severability. If any provision of this Assignment is
held to be in conflict with any applicable statute or rule of law or is
otherwise held to be unenforceable for any reason whatsoever, such
circumstances shall not have the effect of rendering the provision in question
inoperative or unenforceable in any other case or circumstance, or of
rendering any other provision or provisions herein contained invalid,
inoperative, or unenforceable to any extent whatsoever. The invalidity of any
one or more phrases, sentences, clauses or Sections of this Assignment
contained, shall not affect the remaining portions of this Assignment, or any
part thereof.
Section 5.03 Notices. All demands, notices and communications
hereunder shall be in writing, personally delivered or mailed by certified
mail-return receipt requested, and shall be deemed to have been duly given
upon receipt (a) in the case of the Lender, at the following address: c/o JH
Management Corporation, Room 6/9, One International Place, Boston,
Massachusetts 02110-2624, (b) in the case of the Owner, at the following
address: United House, 14-16 Nelson Street, Douglas, Isle of Man, or at other
such address as shall be designated by such party in a written notice to the
other parties.
Section 5.04 Consent to Jurisdiction. Any legal suit, action or
proceeding against the Owner arising out of or relating to this Assignment, or
any transaction contemplated hereby, may be instituted in any federal or state
court in The City of New York, State of New York and the Owner hereby waives
any objection which it may now or hereafter have to the laying of venue of any
such suit, action or proceeding, and the Owner hereby irrevocably submits to
the jurisdiction of any such court in any such suit, action or proceeding.
The Owner hereby irrevocably appoints and designates CT Corporation System,
having an address at 1633 Broadway, New York, New York, its true and lawful
attorney-in-fact and duly authorized agent for the limited purpose of
accepting servicing of legal process and the Owner agrees that service of
process upon such party shall constitute personal service of such process on
the Owner. The Owner shall maintain the designation and appointment of such
authorized agent until all amounts payable under this Assignment shall have
been paid in full. If such agent shall cease to so act, the Owner shall
immediately designate and appoint another such agent satisfactory to the Lender
and shall promptly deliver to the Lender evidence in writing of such other
agent's acceptance of such appointment.
Section 5.05 Captions. The captions or headings in this Assignment
are for convenience only and in no way define, limit or describe the scope or
intent of any provisions or sections of this Assignment.
Section 5.06 Governing Law. This Assignment shall be governed by
and interpreted in accordance with the laws of the State of New York, without
giving effect to the principles of conflicts of law.
Section 5.07 No Partnership. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture among the parties
hereto and the services of each party shall be rendered as an independent
contractor and not as agent for any other party.
Section 5.08 Counterparts. This Assignment may be executed in any
number of counterparts and by different parties hereto on separate
counterpart, each of which shall be deemed to be an original. Such
counterparts shall constitute one and the same agreement.
Section 5.09 Survival. The representations, covenants and
agreements contained in or made pursuant to this Assignment in respect of
either party hereto shall survive the execution and delivery of this
Assignment and shall continue in effect so long as such party's obligations
hereunder remain outstanding.
Section 5.10 Integration. This Assignment and the Schedule and
Exhibits hereto constitute the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements, understandings or representations pertaining to the subject
matter hereof, whether oral or written. There are no warranties,
representations or other agreements between the parties in connection with the
subject matter hereof except as specifically set forth or incorporated herein.
Section 5.11 Reproduction of Documents. This Assignment and all
documents relating thereto, including, without limitation, (a) consents,
waivers and modifications which may hereafter be executed, (b) documents
received by any party at the closing, and (c) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made in the regular course
of business) and that any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence.
Section 5.12 Successors and Assigns; Assignment. This Assignment
shall be binding upon and inure to the benefit of the Owner and the Lender and
their respective successors and assigns. The Owner shall not have the right
to assign its rights hereunder or any interest herein without the prior
written consent of the Lender. The Lender, at its sole option, shall have the
right to assign this Assignment, the Serial Loan Agreement, the Term Loan
Agreement, the Security Documents and any of its rights and interest hereunder
and thereunder.
Section 5.13 General Interpretive Principles. For purposes of this
Assignment except as otherwise expressly provided or unless the context
otherwise requires:
(a) the defined terms in this Assignment shall include the
plural as well as the singular, and the use of any gender herein shall be
deemed to include any other gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles as in effect on the date hereof;
(c) references herein to "Articles", "Sections", "Subsections",
"paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, paragraphs and other subdivisions
of this Assignment;
(d) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to paragraphs and
other subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Assignment as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
Section 5.14 Effective Date of Transaction. Notwithstanding and
the fact that this Assignment is dated as of _______ 1, 1994, the transactions
set forth herein shall not be effective until the Closing Date.
IN WITNESS WHEREOF, the Owner and the Lender have caused this
Assignment to be duly executed and delivered by their respective officers
thereunto duly authorized all as of the day and year first above written.
CALIFORNIA PETROLEUM TRANSPORT
CORPORATION, as Lender
By:________________________________
Name:______________________________
Title:_____________________________
CALPETRO TANKERS (BAHAMAS I) LIMITED, as Owner
By:________________________________
Name:______________________________
Title:_____________________________
APPENDIX I
NOTICE OF ASSIGNMENT
California Petroleum Transport Corporation, as mortgagee (the
"Lender") and CalPetro Tankers (Bahamas I) Limited (the "Owner"), owner of the
m.t. [Name of Vessel] (the "Vessel"), hereby give notice that by an assignment
contained in an Assignment of Earnings and Insurances, dated as of _______ 1,
1994, between the Owner and the Lender, the Owner assigned to the Lender all
of its right, title and interest under, to and in all policies and contracts of
insurance of whatsoever nature and all entries with protection and indemnity
clubs or societies now or hereafter taken out in respect of the Vessel, its
rights, disbursements, profits, including all claims of whatsoever nature
thereunder or otherwise. This Notice is to be endorsed on all policies and
certificates of entry evidencing such insurances.
All claims payable shall be subject to the following conditions:
(i) Any claim payable in respect of an actual or
constructive or arranged or agreed or compromised total loss, or
loss in the event of the confiscation, compulsory acquisition or
requisition of the Vessel, for title or use, by any government of
any country or any department, agency or representative thereof,
pursuant to any present or future law, proclamation, order, decree
or otherwise, shall be payable to the Lender, provided always that
the written consent of the Lender shall be obtained prior to the
arranged or agreed or compromised total loss being agreed with the
underwriters (insurers);
(ii) All other claims shall be released to (the repairer or
salvor for the repair, salvage or other charges involved or to the
Owners as reimbursement if it has fully repaired the damages and
paid all of the salvage and other charges;
Notwithstanding the foregoing, if there exists an Event of Default under
the First Preferred Ship Mortgage, dated ________ __, 1994, on the Vessel
given by the Owner in favor of the Lender and the brokers and/or Underwriters
(insurers) have been so notified by the Lender, all claims shall be payable to
the Lender.
The underwriters (insurers) agree that the Lender shall be advised
immediately of the termination of this policy (entry), and in the event of any
failure by the Owner to pay premiums (dues or Club calls) as and when due the
Lender shall be given at least fourteen (14) days' prior telegraphic or telex
notice of the cancellation or material alteration of this policy (entry).
The Lender shall have no obligations whatsoever to pay any premiums or
costs (dues or Club calls), but shall have the right to do so in the event of
non-payment by the Owner. The underwriters (insurers) shall promptly advise
the Lender of any act of omission of which the Underwriters (insurers) are
aware that might void this policy (entry) or make the same invalid or
unenforceable in whole or in part.
Endorsement
California Petroleum Transport Corporation, as mortgagee (the
"Lender") and CalPetro Tankers (Bahamas I) Limited (the "Owner"), owner of the
m.t. [Name of Vessel] (the "Vessel"), hereby give notice that by an assignment
contained in an Assignment of Earnings and Insurances, dated as of _______ 1,
1994, between the Owner and the Lender, the Owner assigned to the Lender all
of its right, title and interest under, to and in all policies and contracts of
insurance of whatsoever nature and all entries with protection and indemnity
clubs or societies now or hereafter taken out in respect of the Vessel, its
rights, disbursements, profits or otherwise.
It is hereby noted that all claims shall be paid to the Owner
unless and until the Lender, as mortgagee, shall have given notice in writing
that the Owner is in default under the First Preferred Ship Mortgage, _______
__, 1994 on the Vessel given by the Owner in favor of the Lender, as
mortgagee, in which event such claims shall be payable to the Lender, as
mortgagee. Any modification of the terms of this insurance or cancellation or
termination by reason of nonpayment of premiums, dues, assessments,
contributions or other amounts which may become due shall not become effective
against the interests of the Lender, as mortgagee its successors or assigns
until fourteen (14) days' prior telegraphic or telex notice is given to the
Lender, as mortgagee its successors or assigns of such modification,
cancellation or termination.
CALPETRO TANKERS (BAHAMAS I)
LIMITED
By: __________________________
Name:_________________________
Title:________________________
APPENDIX II
NOTICE OF ASSIGNMENT
CalPetro Tankers (Bahamas I) Limited (the "Owner"), owner of the m.t.
[Name of Vessel] (the "Vessel"), hereby gives you notice that by an assignment
contained in an Assignment of Earnings, dated as of _______ 1, 1994, between
the Owner and California Petroleum Transport Corporation (the "Lender"), the
Owner assigned to the Lender all of its right, title and interest under, to
and in (a) any and all moneys due and to become due to the Owner under any and
all present and future charter parties, bills of lading, contracts and other
engagements of affreightment or for the carriage or transportation of cargo,
salvage and other operations of every kind whatsoever of the Vessel; and (b)
any and all claims and causes of action for money, loss or damages that may
accrue arising out of or in any way connected with the present or future use,
operation or management of the Vessel (including proceeds of insurance against
requisition for or other loss of hire or use of the Vessel) or arising out of
or in any way connected with any and all such present and future charter
parties, bills of lading, contracts and other engagements of affreightment or
for the carriage or transportation of cargo, salvage and other operations of
the Vessel and any and all guaranties with respect to any of the foregoing,
together with the income and proceeds of any and all of the foregoing (all
such right, title and interest herein called the "Freights").
So long as the Assignment remains effective, upon your receipt of notice
of the occurrence of an Event of Default under the Term Loan Agreement or
Serial Loan Agreement referred to in the Assignment, pay any and all sums
under your charter with the Owner directly to Account No. ________________, at
______________, or otherwise to such other account as you may be notified in
writing at any time or from time to time.
Please execute the attached Letter of Consent and Acknowledgement of
Assignment and return it to the undersigned.
CALPETRO TANKERS (BAHAMAS I)
LIMITED
By:__________________________
Name:________________________
Title:_______________________
Appendix III
LETTER OF CONSENT AND ACKNOWLEDGEMENT OF ASSIGNMENT
__________ __, 1994
[Name of Charterer]
Dear Sirs:
The undersigned hereby consents to and acknowledges receipt of a signed
copy of the Assignment of Earnings and Insurances (the "Assignment"), dated as
of __________ 1, 1994, between CalPetro Tankers (Bahamas I) Limited (the
"Owner") and yourselves as adequate notice of such assignment to you of the
Charter (the "Charter"), dated __________, ____ between us and the Owner and
of all the right, title and interest of the Owner in, to and under the Charter.
So long as the Assignment remains effective, we hereby agree that, upon
your notification to us of the occurrence of an Event of Default under the
Term Loan Agreement or Serial Loan Agreement referred to in the Assignment, we
shall pay any and all sums which we are legally obligated to pay to the Owner
or otherwise as stated in and according to the Charter directly to your
Account No. ________________, at ______________, or otherwise to such other
account as you may at any time or from time to time, designate by notice to us
in writing.
Payments of moneys under the Charter may be adjusted, reduced or
withheld only as expressly provided therein. Payments to you shall not be
subject to any right of set-off or defense by way of counterclaim or otherwise
which the undersigned may have against the Owner or any entity substituted for
it other than under the Charter and all payments once made to you will be
final, and once paid we will not, for any reason whatsoever, seek to recover
any such payment made to you by virtue of the Assignment or this Letter of
Consent.
We confirm that the terms of the Charter remain in full force and effect
and constitute the entire agreement between the parties thereto with respect
to the Vessel and that the Owner is not presently in breach of the terms of
the Charter. We further confirm that the terms of the Charter have not been
varied or modified and that the terms of the Charter will not after the date
hereof be varied or modified without your prior written consent.
We confirm that we have received no prior notice of any assignment by
the Owner of any interest in the Charter.
The undersigned will not permit any amendment, modification,
cancellation or other alteration in the Charter, nor will it consent to or
accept the substitution thereunder of any party for the Owner without your
prior written consent.
[Name of Charterer], as Charterer
By:_________________________________
Name:_______________________________
Title:______________________________
SCHEDULE 1
Defined Terms Used in the Assignment
"Assignment of Charter" means the assignment between the Owner and the
Lender, as amended from time to time in accordance with the terms thereof,
pursuant to which the Owner assigns to the Lender all of its right, title and
interest in, to and under the Initial Charter to secure its obligations under
the Loan Agreements.
"Assignment" or "Assignment of Earnings and Insurances" means the
assignment between the Owner and the Lender, as amended from time to time in
accordance with the terms thereof, pursuant to which the Owner assigns to the
Lender all of its right, title and interest in, to and under the freights and
hires (as well as any charters entered into after the Closing Date) with
respect to the Vessel to secure its obligations under the Loan Agreements.
"Assignment of Guarantee" means the assignment between the Owner and the
Lender, as amended from time to time in accordance with the terms thereof,
pursuant to which the Owner assigns to the Lender all of its right, title and
interest in, to and under the Chevron Guarantee to secure its obligations
under the Loan Agreements.
"Assignment of Management Agreement" means the assignment between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner assigns to the Lender all of its
right, title and interest in, to and under the Management Agreement to secure
its obligations under the Loan Agreements.
"Assignment of Purchase Agreement" means the assignment between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner assigns to the Lender all of its
right, title and interest in, to and under the Purchase Agreement to secure
its obligations under the Loan Agreements.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in New York, New York, or in the city and state
where the Trustee's principal offices are located, are authorized or are
obligated by law, executive order or governmental decree to be closed.
"Chevron" means Chevron Corporation, a Delaware corporation.
"Chevron Guarantee" means the guarantee of the obligations of the
Initial Charterer under the Initial Charter given by Chevron.
"Closing Date" means _________ __, 1994.
"Collateral" means (i) an assignment of the Initial Charter, (ii) a
mortgage on the Vessel, (iii) an assignment of the earnings and insurances on
the Vessel, (iv) an assignment of the Chevron Guarantee, (v) an assignment of
the Management Agreement relating to the Vessel, (vi) an assignment of the
Purchase Agreement, (vii) the pledge of the shares of the Owner by Owner's
shareholder and (viii) a blanket security interest on all of the assets of the
Owner now existing or hereafter created, together with all income and proceeds
thereof.
"Event of Default" means an Event of Default under Section 6.01 of the
Loan Agreements.
"Governmental Approval" means any authorization, consent, approval,
license, franchise, lease, ruling, permit, tariff, rate, certification,
exemption, filing or registration by or with any Governmental Authority
relating to the ownership of the Collateral or to the execution, delivery or
performance of the Loan Agreement or any Security Document.
"Governmental Authority" means the federal government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any other governmental entity with authority over the Owner
or operation of the Vessels.
"Indentures" means the Indenture, dated as of ____________, ___ between
the Lender and the Trustee pursuant to which the Term Mortgage Notes will be
issued and the Indenture, dated as of _____________, ___ between the Lender
and the Trustee pursuant to which the Serial Mortgage Notes will be issued.
"Initial Charter" means with respect to each Vessel, the Bareboat
Charter, dated _________, between the Initial Charterer and the Owner.
"Initial Charterer" means Chevron Transport Corporation, a Liberian
corporation.
"Issue of One Debenture" means each Issue of One Debenture between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner grants to the Lender a security
interest in all of its assets.
"Law" means any statute, law, rule, regulation, ordinance, order, code,
policy or rule of common law, now or hereafter in effect, and any judicial or
administrative interpretation thereof by a Governmental Authority or
otherwise, including any judicial or administrative order, consent decree or
judgment.
"Lender" means California Petroleum Transport Corporation, a corporation
organized under the laws of the State of Delaware.
"Loan Agreements" means, collectively, the Serial Loan Agreement and the
Term Loan Agreement.
"Loans" means, collectively, the Serial Loans and the Term Loan.
"Loss Date" means the date which is 90 days after the occurrence of a
Total Loss of the Vessel.
"Management Agreement" means the agreement, dated the Closing Date,
among the Owner, the Manager and the Technical Adviser.
"Manager" means the Person performing the duties of the Manager under the
Management Agreement, initially P.D. Gram & Co. ans.
"Mortgage" means, with respect to the Vessel, the first preferred ship
mortgages on the Vessel granted by the Owner to the Lender, as amended from
time to time in accordance with the terms of such Mortgage.
"Owner" means CalPetro Tankers (Bahamas I) Limited, a company organized
under the laws of The Commonwealth of the Bahamas.
"Payment Date" means each ________ and ______________ commencing
___________ 1995.
"Person" means an individual, a partnership, a corporation, a joint
venture, an unincorporated association, a joint-stock company, a trust, or
other entity or a government or any agency or political subdivision thereof.
"Purchase Agreement" means the Vessel Purchase Agreement, dated as of
_________________, between the Owner and the Initial Charterer wherein the
Owner purchases the Vessel from the Initial Charterer.
"Registration Jurisdiction" means the jurisdiction in which the Vessel
is or will be registered.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or partnership agreement or other organizational or
governing documents of such Person, and, any Law applicable to or binding upon
such Person or any of its properties or to which such Person or any of its
properties is subject.
"Securities" means, collectively, the Term Mortgage Notes and the Serial
Mortgage Notes.
"Security Documents" means the Serial Loan Agreement, the Term Loan
Agreement, the Mortgage, the Assignment of Charter, the Assignment of Earnings
and Insurances, the Assignment of Guarantee, the Assignment of Management
Agreement, the Assignment of Purchase Agreement, the Issue of One Debenture,
collectively.
"Serial Loan Agreement" the Loan Agreement, dated as of _______ 1, 1994
between the Lender and the Owner pursuant to which the Lender will make the
Serial Loan to the Owner.
"Serial Loans" shall have the meaning assigned to such term in the
Preliminary Statement of this Assignment.
"Serial Mortgage Notes" means the Serial First Preferred Term Mortgage
Notes which will mature serially from _____________, 1995 to _____________,
2005 in the initial aggregate amount of $168,500,000 issued by the Lender
concurrently with the issuance of the Term Mortgage Notes.
"Serial Obligations" means the payment, performance or obligations of
any kind or nature whatsoever of the Owner under and pursuant to the Serial
Loan Agreement, any Security Document and any instrument, agreement or
document referred to therein.
"State" means any state of the United States of America and, in
addition, the District of Columbia.
"Technical Adviser" means the person performing the duties of the
Technical Adviser under the Management Agreement, initially Barber Ship
Management Group.
"Term Loan" shall have the meaning assigned to such term in the
Preliminary Statement of this Assignment.
"Term Loan Agreement" means the Loan Agreement, dated as of _______ 1,
1994 between the Owner and the Lender pursuant to which the Lender makes the
Term Loan to the Owner.
"Term Mortgage Notes" means __% First Preferred Mortgage Notes Due 2014
in the initial aggregate amount of $117,900,000 issued by the Lender
concurrently with the issuance of the Serial Mortgage Notes.
"Term Obligations" means the payment, performance or obligations of any
kind or nature whatsoever of the Owner under and pursuant to the Term Loan
Agreement, any Security Document and any instrument, agreement or document
referred to therein.
"Trustee" means Chemical Trust Company of California.
"Vessel" shall have the meaning assigned to such term in the Preliminary
Statement of the Assignment.
______________________________________________________________________________
______________________________________________________________________________
EXHIBIT 4.9
California Petroleum Transport Corporation
and
CalPetro Tankers (Bahamas I) Limited
___________________________________
ASSIGNMENT OF CHARTER
Dated as of __________ 1, 1994
___________________________________
______________________________________________________________________________
______________________________________________________________________________
Table of Contents
Page No.
ARTICLE I
DEFINITIONS
ARTICLE II
ASSIGNMENT
Section 2.01 Security Interest........................................ 1
Section 2.02 Assignment............................................... 1
Section 2.03 Owner to Remain Liable................................... 2
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE OWNER
Section 3.01 Organization, Power and Status of the Owner.............. 2
Section 3.02 Authorization; Enforceability; Execution and Delivery.... 3
Section 3.03 No Conflicts; Laws and Consents; No Default.............. 3
Section 3.04 Governmental Approvals................................... 3
Section 3.05 Litigation............................................... 3
Section 3.06 No Prior Assignment...................................... 3
Section 3.07 The Initial Charter...................................... 3
ARTICLE IV
COVENANTS OF THE OWNER
Section 4.01 Consent of Initial Charterer............................. 4
Section 4.02 Enforcement of Initial Charter........................... 4
Section 4.03 Amendment of Initial Charter; Assignment of Initial
Charter.................................................. 4
Section 4.04 Performance of Obligations............................... 5
Section 4.05 Notices.................................................. 5
Section 4.06 Further Assurances....................................... 5
Section 4.07 Lender as Attorney-in-Fact of Owner...................... 5
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01 Amendment................................................ 5
Section 5.02 Severability............................................. 5
Section 5.03 Notices.................................................. 5
Section 5.04 Consent to Jurisdiction.................................. 6
Section 5.05 Captions................................................. 6
Section 5.06 Governing Law............................................ 6
Section 5.07 No Partnership........................................... 6
Section 5.08 Counterparts............................................. 6
Section 5.09 Survival................................................. 6
Section 5.10 Integration.............................................. 7
Section 5.11 Reproduction of Documents................................ 7
Section 5.12 Successors and Assigns; Assignment....................... 7
Section 5.13 General Interpretive Principles.......................... 7
Section 5.14 Effective Date of Transaction............................ 8
Assignment of Charter, dated as of __________ 1, 1994 (the
"Assignment"), between California Petroleum Transport Corporation, a
corporation organized under the laws of the State of Delaware (the
"Lender") and CalPetro Tankers (Bahamas I) Limited, a company organized
under the laws of The Commonwealth of the Bahamas (the "Owner").
PRELIMINARY STATEMENT
The Owner has requested that the Lender make two loans to the
Owner: one loan in the aggregate principal amount equal to $____________ (the
"Term Loan") and one series of loans in the aggregate principal amount equal
to $____________ (collectively, the "Serial Loans" and, collectively with the
Term Loan, the "Loans"). The Loans will be made pursuant to the terms and
conditions of two Loan Agreements, each dated as of the date hereof, each
between the Lender and the Owner. The net proceeds of the Serial Loans and
the Term Loan will be used by the Owner to acquire the m.t. _________ (the
"Vessel") from Chevron Transport Corporation (the "Initial Charterer"). The
Vessel will be bareboat chartered to the Initial Charterer pursuant to the
Bareboat Charter (the "Initial Charter"), dated as of the date hereof, between
the Owner and the Initial Charterer. As collateral security for its
obligations under the Loan Agreements, the Owner will assign, pledge, mortgage
and grant the Lender a security interest in, inter alia, the Vessel, the
Initial Charter and the earnings and insurances of the Vessel.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and of other valuable consideration, receipt of
which is hereby acknowledged, the Owner and the Lender hereby agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this Assignment shall have the meanings
assigned to such terms in Schedule 1 to this Assignment, and the definitions
of such terms shall be equally applicable to both the singular and plural
forms of such terms.
ARTICLE II
ASSIGNMENT
Section 2.01 Security Interest. This Assignment is made and
delivered as security for the Serial Obligations and the Term Obligations,
equally and ratably; provided, however, in the event that the Serial
Obligations are satisfied and paid in full pursuant to the terms and
conditions of the Serial Loan Agreement, this Assignment will be security
solely and exclusively for the Term Obligations.
Section 2.02 Assignment. In order to provide for the payment of
and as security for the Serial Obligations and the Term Obligations, equally
and ratably, the Owner has sold, assigned, transferred, set over and granted a
security interest and does hereby sell, assign, transfer, set over and grant a
security interest unto the Lender, its successors and assigns, for its and
their respective successors' and assigns' own proper use and benefit, all of
the Owner's right, title and interest in and to the Initial Charter, including
without limitation any moneys whatsoever payable to the Owner under the
Initial Charter, together with the income and proceeds thereof and all
other rights and benefits whatsoever accruing to the Owner under the
Initial Charter; provided, however, that the Owner shall keep the Lender
fully and effectively indemnified from and against all actions, losses,
claims, proceedings, costs, demands and liabilities which may be suffered
by the Lender under or by virtue of the Initial Charter or this Assignment;
provided further, however, in the event that the Serial Obligations are
satisfied and paid in full pursuant to the terms and conditions of the
Serial Loan Agreement, the sale, assignment, transfer and grant of security
interest made by the Owner pursuant to the terms of this Assignment will be
solely and exclusively for the benefit of the Lender as Lender under the
Term Loan Agreement and this Assignment will be security solely and
exclusively for the Term Obligations.
Section 2.03 Owner to Remain Liable. (a) Anything in this
Assignment contained to the contrary notwithstanding, the Owner shall remain
liable under the Initial Charter, and shall observe, perform and fulfill all
of the conditions and obligations to be observed, performed and fulfilled by
it thereunder, and the Lender shall have no obligation or liability of any
kind whatsoever thereunder or by reason of or arising out of this Assignment,
nor shall the Lender be under any liability whatsoever in the event of any
failure by the Owner to perform its obligations thereunder or be required or
obligated in any manner to observe, perform or fulfill any of the conditions
or obligations of the Owner thereunder or pursuant thereto, or to make any
payment or to make any inquiry as to the nature or sufficiency of any payment
received by it or the Owner thereunder, or to present or file any claim, or to
take any other action to collect or enforce the payment of any amounts which
may have been assigned to the Lender or to which the Lender may be entitled
hereunder at any time or times.
(b) Any and all rights assigned herein may be further assigned by
the Lender, including, without being limited to, assignments in connection
with the enforcement of the assignments made by this Assignment and any
subsequent holder of this Assignment shall succeed to and have all the rights
and powers of the Lender under this Assignment.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE OWNER
The Owner hereby represents and warrants to the Lender as follows:
Section 3.01 Organization, Power and Status of the Owner. The
Owner (a) is a corporation duly formed, validly existing and in good standing
under the laws of The Bahamas and (b) is duly authorized, to the extent
necessary, to do business in each jurisdiction where the character of its
properties or the nature of its activities makes such qualification necessary.
The Owner has all requisite corporate power and authority to own and operate
the property it purports to own and to carry on its business as now being
conducted and as proposed to be conducted in respect of the Vessel.
Section 3.02 Authorization; Enforceability; Execution and Delivery.
(a) The Owner has all necessary corporate power and authority to execute,
deliver and perform under this Assignment.
(b) All action on the part of the Owner that is required for the
authorization, execution, delivery and performance of this Assignment has been
duly and effectively taken; and the execution, delivery and performance of
this Assignment does not require the approval or consent of any Person except
for such consents and approvals as have been obtained on or prior to the
Closing Date.
(c) This Assignment has been duly executed and delivered by the
Owner. This Assignment constitutes the legal, valid and binding obligation of
the Owner, enforceable against it in accordance with the terms thereof.
Section 3.03 No Conflicts; Laws and Consents; No Default. (a)
Neither the execution, delivery and performance of this Assignment nor the
consummation of any of the transactions contemplated hereby nor performance of
or compliance with the terms and conditions hereof (i) contravenes any
Requirement of Law applicable to the Owner or (ii) constitutes a default under
any Security Document.
(b) The Owner is in compliance with and not in default under any
and all Requirements of Law applicable to the Owner and all terms and
provisions of this Assignment.
Section 3.04 Governmental Approvals. All Governmental Approvals
which are required to be obtained in the name of the Owner in connection with
the execution, delivery and performance by the Owner of this Assignment have
been obtained and are in effect on the Closing Date.
Section 3.05 Litigation. There are no actions, suits or
proceedings at law or in equity or by or before any Governmental Authority now
pending against the Owner or, to the best of the Owner's knowledge, threatened
against the Owner or pending or threatened against any property or other
assets or rights of the Owner with respect to this Assignment.
Section 3.06 No Prior Assignment. The Owner has not assigned or
pledged, and hereby covenants that it will not assign or pledge, so long as
this Assignment shall remain in effect, the Initial Charter or any part of the
rights, titles and interests hereby assigned, to anyone other than the Lender,
or its successors or assigns.
Section 3.07 The Initial Charter. The Initial Charter constitutes
the legal, valid and binding obligation of the Initial Charterer and of the
Owner as "Owners" thereunder and is in full force and effect in the form of
Exhibit "A" attached hereto; there are no amendments, additions, addenda or
modifications thereto; said Exhibit "A" represents the entirety of the
chartering and other arrangements referred to therein; and neither of the
parties thereto is in default thereunder.
ARTICLE IV
COVENANTS OF THE OWNER
The Owner hereby covenants and agrees that so long as any of the
Serial Obligations or Term Obligations remains outstanding:
Section 4.01 Consent of Initial Charterer. On the Closing Date,
the Owner shall deliver to the Initial Charterer a copy of this Assignment and
shall procure the execution by the Initial Charterer of the Consents and
Acknowledgment set out in Exhibit A hereto and deliver said Consents and
Acknowledgment to the Lender on the Closing Date.
Section 4.02 Enforcement of Initial Charter. (a) The Owner will
do or permit to be done each and every act or thing which the Lender may from
time to time require to be done for the purpose of enforcing the Lender's
rights under the Initial Charter and this Assignment.
(b) If an Event of Default shall occur under either the Term
Loan Agreement or the Serial Loan Agreement, the Owner shall cause all moneys
hereby assigned or agreed to be assigned or arising from or in connection with
any of the rights, title, interest and benefits of the Owner under the Initial
Charter shall be paid to the credit of Account No. _____________ of the Lender
at Chemical Trust Company of California, or to such other account as the Lender
may from time to time direct.
(c) The Owner will not exercise any right or powers conferred on
it by the Initial Charter in connection with any default or alleged default by
the Initial Charterer thereunder (including without limitation the right of
termination and substitution) unless and until requested so to do by the
Lender whereupon the Owner agrees that it will do so provided always that the
Lender shall not be responsible in any way whatsoever in the event that the
exercise of any right or power (including the right of termination and
substitution) be thereafter adjudged improper or to constitute a repudiation
of the Initial Charter by the Owner.
Section 4.03 Amendment of Initial Charter; Assignment of Initial
Charter. (a) The Owner will not, except with the previous written consent of
the Lender, agree to any variation of the Initial Charter or release the
Initial Charterer from any of its obligations thereunder or waive any breach
of the Initial Charterer's obligations thereunder or consent to any such act
or omission of the Initial Charterer as would otherwise constitute such breach.
(b) The Owner will not, except with the previous written consent
of the Lender, assign the Initial Charter to any other Person.
Section 4.04 Performance of Obligations. The Owner will perform
its obligations under the Initial Charter and will use its best efforts to
cause the Initial Charterer to perform its obligations under the Initial
Charter.
Section 4.05 Notices. The Owner will send a copy of all notices
received or given by it under the Initial Charter forthwith to the Lender.
Section 4.06 Further Assurances. The Owner will at any time and
from time to time, upon the written request of the Lender, promptly and duly
execute and deliver any and all such further instruments and documents and
take such action as the Lender may deem desirable in order to obtain the full
benefits of this Assignment and of the rights and powers herein granted.
Section 4.07 Lender as Attorney-in-Fact of Owner. The Owner hereby
constitutes the Lender, and its successors and assigns, its true and lawful
attorney-in-fact, irrevocably, with full power in its own name, in the name of
its agents or nominees or in the name of the Owner or otherwise, to ask,
require, demand, receive, enforce and give acquittance for, any and all moneys
and claims for moneys due and to become due and payable under or arising out
of the Initial Charter, to endorse any checks or other instruments or orders
in connection therewith and to file any claims or take any action or institute
any proceedings which to the Lender may seem to be necessary or advisable
under this Assignment. Any action or proceeding brought by the Lender
pursuant to any of the provisions of this Assignment or otherwise and any
claim made by the Lender hereunder may be compromised, withdrawn or otherwise
dealt with by the Lender without any notice to or approval of the Owner.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01 Amendment. This Assignment may be amended from time
to time by written agreement signed by the parties hereto.
Section 5.02 Severability. If any provision of this Assignment is
held to be in conflict with any applicable statute or rule of law or is
otherwise held to be unenforceable for any reason whatsoever, such
circumstances shall not have the effect of rendering the provision in question
inoperative or unenforceable in any other case or circumstance, or of
rendering any other provision or provisions herein contained invalid,
inoperative, or unenforceable to any extent whatsoever. The invalidity of any
one or more phrases, sentences, clauses or Sections of this Assignment
contained, shall not affect the remaining portions of this Assignment, or any
part thereof.
Section 5.03 Notices. All demands, notices and communications
hereunder shall be in writing, personally delivered or mailed by certified
mail-return receipt requested, and shall be deemed to have been duly given
upon receipt (a) in the case of the Lender, at the following address: c/o JH
Management Corporation, Room 6/9, One International Place, Boston,
Massachusetts 02110-2624, (b) in the case of the Owner, at the following
address: United House, 14-16 Nelson Street, Douglas, Isle of Man, or at other
such address as shall be designated by such party in a written notice to the
other parties.
Section 5.04 Consent to Jurisdiction. Any legal suit, action or
proceeding against the Owner arising out of or relating to this Assignment, or
any transaction contemplated hereby, may be instituted in any federal or state
court in The City of New York, State of New York and the Owner hereby waives
any objection which it may now or hereafter have to the laying of venue of any
such suit, action or proceeding, and the Owner hereby irrevocably submits to
the jurisdiction of any such court in any such suit, action or proceeding.
The Owner hereby irrevocably appoints and designates CT Corporation System,
having an address at 1633 Broadway, New York, New York, its true and lawful
attorney-in-fact and duly authorized agent for the limited purpose of
accepting servicing of legal process and the Owner agrees that service of
process upon such party shall constitute personal service of such process on
such Person. The Owner shall maintain the designation and appointment of such
authorized agent until all amounts payable under this Assignment shall have
been paid in full. If such agent shall cease to so act, the Owner shall
immediately designate and appoint another such agent satisfactory to the Lender
and shall promptly deliver to the Lender evidence in writing of such other
agent's acceptance of such appointment.
Section 5.05 Captions. The captions or headings in this Assignment
are for convenience only and in no way define, limit or describe the scope or
intent of any provisions or sections of this Assignment.
Section 5.06 Governing Law. This Assignment shall be governed by
and interpreted in accordance with the laws of the State of New York, without
giving effect to the principles of conflicts of law.
Section 5.07 No Partnership. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture among the parties
hereto and the services of each party shall be rendered as an independent
contractor and not as agent for any other party.
Section 5.08 Counterparts. This Assignment may be executed in any
number of counterparts and by different parties hereto on separate
counterpart, each of which shall be deemed to be an original. Such
counterparts shall constitute one and the same agreement.
Section 5.09 Survival. The representations, covenants and
agreements contained in or made pursuant to this Assignment in respect of
either party hereto shall survive the execution and delivery of this
Assignment and shall continue in effect so long as such party's obligations
hereunder remain outstanding.
Section 5.10 Integration. This Assignment and the Schedule and
Exhibits hereto constitute the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and supersede all
prior agreements, understandings or representations pertaining to the subject
matter hereof, whether oral or written. There are no warranties,
representations or other agreements between the parties in connection with the
subject matter hereof except as specifically set forth or incorporated herein.
Section 5.11 Reproduction of Documents. This Assignment and all
documents relating thereto, including, without limitation, (a) consents,
waivers and modifications which may hereafter be executed, (b) documents
received by any party at the closing, and (c) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made in the regular course
of business) and that any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence.
Section 5.12 Successors and Assigns; Assignment. This Assignment
shall be binding upon and inure to the benefit of the Owner and the Lender and
their respective successors and assigns. The Owner shall not have the right
to assign its rights hereunder or any interest herein without the prior
written consent of the Lender. The Lender, at its sole option, shall have the
right to assign this Assignment, the Serial Loan Agreement, the Term Loan
Agreement, the Security Documents and any of its rights and interest hereunder
and thereunder.
Section 5.13 General Interpretive Principles. For purposes of this
Assignment except as otherwise expressly provided or unless the context
otherwise requires:
(a) the defined terms in this Assignment shall include the
plural as well as the singular, and the use of any gender herein shall be
deemed to include any other gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles as in effect on the date hereof;
(c) references herein to "Articles", "Sections", "Subsections",
"paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, paragraphs and other subdivisions
of this Assignment;
(d) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to paragraphs and
other subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Assignment as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
Section 5.14 Effective Date of Transaction. Notwithstanding and
the fact that this Assignment is dated as of __________ 1, 1994, the
transactions set forth herein shall not be effective until the Closing Date.
IN WITNESS WHEREOF, the Owner and the Lender have caused this
Assignment to be duly executed and delivered by their respective officers
thereunto duly authorized all as of the day and year first above written.
CALIFORNIA PETROLEUM TRANSPORT
CORPORATION, as Lender
By:__________________________________
Name:________________________________
Title:_______________________________
CALPETRO TANKERS (BAHAMAS I) LIMITED, as Owner
By:__________________________________
Name:________________________________
Title:_______________________________
Exhibit A
LETTER OF ACKNOWLEDGMENT
TO ASSIGNMENT OF CHARTER
__________ __, 1994
CALIFORNIA PETROLEUM TRANSPORT
CORPORATION, as Lender
CHEMICAL TRUST COMPANY OF CALIFORNIA,
as Collateral Trustee
Dear Sirs:
The undersigned hereby consents to and acknowledges receipt of (i)
a signed copy of the Assignment of Charter (the "Assignment"), dated as of
__________ 1, 1994, between CalPetro Tankers (Bahamas I) Limited (the "Owner")
and California Petroleum Transport Corporation (the "Lender") as adequate
notice of such assignment to the Lender of the Initial Charter (as defined in
the Assignment) and of all the right, title and interest of the Owner in, to
and under the Initial Charter and (ii) a signed copy of the Collateral
Assignment of Charter (the "Collateral Assignment"), dated as of ____________
1, 1994, between the Lender and Chemical Trust Company of California (the
"Collateral Trustee") as adequate notice of such further assignment to the
Collateral Trustee of the Initial Charter and all of the right, title and
interest of the Lender in, to and under the Initial Charter.
So long as the Assignment remains effective, we hereby agree that,
upon notification to us of the occurrence of an Event of Default under the
Term Loan Agreement or Serial Loan Agreement referred to in the Assignment, we
shall pay any and all sums which we are legally obligated to pay to the Owner
or otherwise as stated in and according to the Initial Charter directly to the
Collateral Trustee's Account No. ________________, at ______________, or
otherwise to such other account as you may at any time or from time to time,
designate by notice to us in writing.
Payments of moneys under the Initial Charter may be adjusted,
reduced or withheld only as expressly provided therein. Payments to the
Collateral Trustee shall not be subject to any right of set-off or defense by
way of counterclaim or otherwise which the undersigned may have against the
Owner or any entity substituted for it other than under the Initial Charter
and all payments once made to you will be final, and once paid we will not,
for any reason whatsoever, seek to recover from you any such payment made
to the Collateral Trustee by virtue of the Assignment, the Collateral
Assignment or this Letter of Consent.
We confirm that the terms of the Initial Charter remain in full
force and effect and constitute the entire agreement between the parties
thereto with respect to the Vessel and that the Owner is not presently to our
knowledge in breach of the terms of the Initial Charter. We further confirm
that the terms of the Initial Charter have not been varied or modified and
that the terms of the Initial Charter will not after the date hereof be varied
or modified without the prior written consent of the Collateral Trustee.
We confirm that we have received no prior notice of any assignment
by the Owner of any interest in the Initial Charter.
The undersigned will not permit any amendment, modification,
cancellation or other alteration in the Initial Charter, nor will it consent
to or accept the substitution thereunder of any party for the Owner without
your prior written consent.
CHEVRON TRANSPORT CORPORATION, as Initial
Charterer
By:__________________________________
Name:________________________________
Title:_______________________________
SCHEDULE 1
Defined Terms Used in the Assignment
"Assignment" or "Assignment of Charter" means the assignment between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner assigns to the Lender all of its
right, title and interest in, to and under the Initial Charter to secure its
obligations under the Loan Agreements.
"Assignment of Earnings and Insurances" means the assignment between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner assigns to the Lender all of its
right, title and interest in, to and under the freights and hires (as well as
any charters entered into after the Closing Date) with respect to the Vessel
to secure its obligations under the Loan Agreements.
"Assignment of Guarantee" means the assignment between the Owner and the
Lender, as amended from time to time in accordance with the terms thereof,
pursuant to which the Owner assigns to the Lender all of its right, title and
interest in, to and under the Chevron Guarantee to secure its obligations
under the Loan Agreements.
"Assignment of Management Agreement" means the assignment between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner assigns to the Lender all of its
right, title and interest in, to and under the Management Agreement to secure
its obligations under the Loan Agreements.
"Assignment of Purchase Agreement" means the assignment between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner assigns to the Lender all of its
right, title and interest in, to and under the Purchase Agreement to secure
its obligations under the Loan Agreements.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in New York, New York, or in the city and state
where the Trustee's principal offices are located, are authorized or are
obligated by law, executive order or governmental decree to be closed.
"Chevron" means Chevron Corporation, a Delaware corporation.
"Chevron Guarantee" means the guarantee of the obligations of the
Initial Charterer under the Initial Charter under the Initial Charter given by
Chevron.
"Closing Date" means __________ __, 1994.
"Collateral" means (i) an assignment of the Initial Charter, (ii) a
mortgage on the Vessel, (iii) an assignment of the earnings and insurances on
the Vessel, (iv) an assignment of the Chevron Guarantee, (v) an assignment of
the Management Agreement relating to the Vessel, (vi) an assignment of the
Purchase Agreement, (vii) the pledge of the shares of the Owner by Owner's
shareholder and (viii) a blanket security interest on all of the assets of the
Owner now existing or hereafter created, together with all income and proceeds
thereof.
"Event of Default" means an Event of Default under Section 6.01 of the
Loan Agreements.
"Governmental Approval" means any authorization, consent, approval,
license, franchise, lease, ruling, permit, tariff, rate, certification,
exemption, filing or registration by or with any Governmental Authority
relating to the ownership of the Collateral or to the execution, delivery or
performance of the Loan Agreement or any Security Document.
"Governmental Authority" means the federal government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any other governmental entity with authority over the Owner
or operation of the Vessels.
"Indentures" means the Indenture, dated as of __________ 1, 1994 between
the Owner and the Trustee pursuant to which the Term Mortgage Notes will be
issued and the Indenture, dated as of __________ 1, 1994 between the Lender
and the Trustee pursuant to which the Serial Mortgage Notes will be issued.
"Initial Charter" means with respect to each Vessel, the Bareboat
Charter, dated _________, between the Initial Charterer and the Owner.
"Initial Charterer" means Chevron Transport Corporation, a Liberian
corporation.
"Issue of One Debenture" means each Issue of One Debenture between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner grants to the Lender a security
interest in all of its assets.
"Law" means any statute, law, rule, regulation, ordinance, order, code,
policy or rule of common law, now or hereafter in effect, and any judicial or
administrative interpretation thereof by a Governmental Authority or
otherwise, including any judicial or administrative order, consent decree or
judgment.
"Lender" means California Petroleum Transport Corporation, a corporation
organized under the laws of the State of Delaware.
"Loan Agreements" means, collectively, the Serial Loan Agreement and the
Term Loan Agreement.
"Loans" means, collectively, the Serial Loans and the Term Loan.
"Loss Date" means the date which is 90 days after the occurrence of a
Total Loss of the Vessel.
"Management Agreement" means the agreement, dated the Closing Date,
among the Owner, the Manager and the Technical Adviser.
"Manager" means the Person performing the duties of the Manager under the
Management Agreement, initially P.D. Gram & Co. ans.
"Mortgage" means, with respect to the Vessel, the first preferred ship
mortgages on the Vessel granted by the Owner to the Lender, as amended from
time to time in accordance with the terms of such Mortgage.
"Owner" means CalPetro Tankers (Bahamas I) Limited, a company organized
under the laws of The Commonwealth of the Bahamas.
"Payment Date" means each ________ and ______________ commencing
___________ 1995.
"Person" means an individual, a partnership, a corporation, a joint
venture, an unincorporated association, a joint-stock company, a trust, or
other entity or a government or any agency or political subdivision thereof.
"Purchase Agreement" means the Vessel Purchase Agreement, dated as of
_________________, between the Owner and the Initial Charterer wherein the
Owner purchases the Vessel from the Initial Charterer.
"Registration Jurisdiction" means the jurisdiction in which the Vessel
is or will be registered.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or partnership agreement or other organizational or
governing documents of such Person, and, any Law applicable to or binding upon
such Person or any of its properties or to which such Person or any of its
properties is subject.
"Securities" means, collectively, the Term Mortgage Notes and the Serial
Mortgage Notes.
"Security Documents" means the Term Loan Agreement, the Serial Loan
Agreement, the Mortgage, the Assignment of Charter, the Assignment of Earnings
and Insurances, the Assignment of Guarantee, the Assignment of Management
Agreement, the Assignment of Purchase Agreement, the Issue of One Debenture,
collectively.
"Serial Loan Agreement" the Loan Agreement, dated as of __________ 1,
1994 between the Lender and the Owner pursuant to which the Lender will make
the Serial Loan to the Owner.
"Serial Loans" shall have the meaning assigned to such term in the
Preliminary Statement of this Assignment.
"Serial Mortgage Notes" means the Serial First Preferred Term Mortgage
Notes which will mature serially from _____________, 1995 to _____________,
2005 in the initial aggregate amount of $168,500,000 issued by the Lender
concurrently with the issuance of the Term Mortgage Notes.
"Serial Obligations" means the payment, performance or obligations of
any kind or nature whatsoever of the Owner under and pursuant to the Serial
Loan Agreement, any Security Document and any instrument, agreement or
document referred to therein.
"State" means any state of the United States of America and, in
addition, the District of Columbia.
"Technical Adviser" means the person performing the duties of the
Technical Adviser under the Management Agreement, initially Barber Ship
Management Group.
"Term Loan" shall have the meaning assigned to such term in the
Preliminary Statement of this Assignment.
"Term Loan Agreement" means the Loan Agreement, dated as of __________
1, 1994 between the Owner and the Lender pursuant to which the Lender makes
the Term Loan to the Owner.
"Term Mortgage Notes" means __% First Preferred Mortgage Notes Due 2014
in the initial aggregate amount of $117,900,000 issued by the Lender
concurrently with the issuance of the Serial Mortgage Notes.
"Term Obligations" means the payment, performance or obligations of any
kind or nature whatsoever of the Owner under and pursuant to the Term Loan
Agreement, any Security Document and any instrument, agreement or document
referred to therein.
"Trustee" means Chemical Trust Company of California.
"Vessel" shall have the meaning assigned to such term in the Preliminary
Statement of this Assignment.
______________________________________________________________________________
______________________________________________________________________________
California Petroleum Transport Corporation
and
Chemical Trust Company of California
___________________________________
COLLATERAL ASSIGNMENT OF CHARTER
Dated as of __________ 1, 1994
___________________________________
______________________________________________________________________________
______________________________________________________________________________
TABLE OF CONTENTS
Page No.
--------
ARTICLE I
DEFINITIONS
ARTICLE II
ASSIGNMENT
Section 2.01 Security Interest 1
Section 2.02 Assignment 1
Section 2.03 Issuer to Remain Liable 2
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE ISSUER
Section 3.01 Organization, Power and Status of the Issuer 2
Section 3.02 Authorization; Enforceability; Execution and Delivery 3
Section 3.03 No Conflicts; Laws and Consents; No Default 3
Section 3.04 Governmental Approvals 3
Section 3.05 Litigatiton 3
Section 3.06 No Prior Assignment 3
Section 3.07 The Assignment of Charter 4
ARTICLE IV
COVENANTS OF THE ISSUER
Section 4.01 Consent of Initial Charterer and Owner 4
Section 4.02 Enforcement of Assignment of Charter 4
Section 4.03 Amendment or Assignment of Charter; Collateral Assignment
of Charter 4
Section 4.04 Performance of Obligations 5
Section 4.05 Notices 5
Section 4.06 Further Assurances 5
Section 4.07 Collateral TGrustee as Attorney-in-Fact of Issuer 5
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01 Amendment 5
Section 5.02 Severability 5
Section 5.03 Notices 6
Section 5.04 Captions 6
Section 5.05 Governing Law 6
Section 5.06 No Partnership 6
Section 5.07 Counterparts 6
Section 5.08 Survival 6
Section 5.09 Integration 6
Section 5.10 Reproduction of Documents 7
Section 5.11 Successors and Assigns; Assignment 7
Section 5.12 General Inerpretive Principles 7
Section 5.13 Effective Date of Transaction 7
Collateral Assignment of Charter, dated as of __________ 1, 1994
(the "Assignment"), between California Petroleum Transport Corporation, a
corporation organized under the laws of the State of Delaware (the "Issuer")
and Chemical Trust Company of California (the "Collateral Trustee").
PRELIMINARY STATEMENT
Issuer has authorized the issuance of the Serial Mortgage Notes
and the Term Mortgage Notes (collectively, the "Notes"). The Notes will be
issued pursuant to the terms and conditions of the Indentures, each dated as
of the date hereof, each between the Issuer and the Collateral Trustee, as
indenture trustee. The net proceeds of the Notes will be used by the Issuer
to make two loans to CalPetro Tankers (Bahamas I) Limited (the "Owner")
pursuant to the Loan Agreements, which will be used by the Owner to acquire
the m.t. _________ (the "Vessel") from Chevron Transport Corporation (the
"Initial Charterer"). The Vessel will be bareboat chartered to the Initial
Charterer pursuant to the Bareboat Charter (the "Initial Charter"), dated as
of the date hereof, between the Owner and the Initial Charterer. As
collateral security for its obligations under the Indentures, the Issuer will
assign, pledge, mortgage and grant the Collateral Trustee a security interest
in, inter alia, all of the Issuer's right, title and interest in and to the
Initial Charter and the Assignment of Charter.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and of other valuable consideration, receipt of
which is hereby acknowledged, the Collateral Trustee and the Issuer hereby
agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this Assignment shall have the meanings
assigned to such terms in Schedule 1 to this Assignment, and the definitions
of such terms shall be equally applicable to both the singular and plural
forms of such terms.
ARTICLE II
ASSIGNMENT
Section 2.01 Security Interest. This Assignment is made and
delivered as security for the Serial Obligations and the Term Obligations,
equally and ratably; provided, however, in the event that the Serial
Obligations are satisfied and paid in full pursuant to the terms and
conditions of the Serial Indenture, this Assignment will be security solely
and exclusively for the Term Obligations.
Section 2.02 Assignment. In order to provide for the payment of
and as security for the Serial Obligations and the Term Obligations, equally
and ratably, the Issuer has sold, assigned, transferred, set over and granted
a security interest and does hereby sell, assign, transfer, set over and grant
a security interest unto the Collateral Trustee, its successors and assigns,
for its and their respective successors' and assigns' own proper use and
benefit, all of the Issuer's right, title and interest in and to the Initial
Charter and the Assignment of Charter, including without limitation any moneys
whatsoever payable to the Issuer under the Initial Charter and the Assignment
of Charter, together with the income and proceeds thereof and all other rights
and benefits whatsoever accruing to the Issuer under the Initial Charter and
the Assignment of Charter; provided, however, that the Issuer shall keep the
Collateral Trustee fully and effectively indemnified from and against all
actions, losses, claims, proceedings, costs, demands and liabilities which may
be suffered by the Collateral Trustee under or by virtue of the Initial
Charter, Assignment of Charter or this Assignment; provided further, however,
in the event that the Serial Obligations are satisfied and paid in full
pursuant to the terms and conditions of the Serial Indenture, the sale,
assignment, transfer and grant of security interest made by the Issuer
pursuant to the terms of this Assignment will be solely and exclusively for
the benefit of the Collateral Trustee as Collateral Trustee under the Term
Indenture and this Assignment will be security solely and exclusively for the
Term Obligations.
Section 2.03 Issuer to Remain Liable. (a) Anything in this
Assignment contained to the contrary notwithstanding, the Issuer shall remain
liable under the Assignment of Charter, and shall observe, perform and fulfill
all of the conditions and obligations to be observed, performed and fulfilled
by it thereunder, and the Collateral Trustee shall have no obligation or
liability of any kind whatsoever thereunder or by reason of or arising out of
this Assignment, nor shall the Collateral Trustee be under any liability
whatsoever in the event of any failure by the Issuer to perform its
obligations thereunder or be required or obligated in any manner to observe,
perform or fulfill any of the conditions or obligations of the Issuer
thereunder or pursuant thereto, or to make any payment or to make any inquiry
as to the nature or sufficiency of any payment received by it or the Issuer
thereunder, or to present or file any claim, or to take any other action to
collect or enforce the payment of any amounts which may have been assigned to
the Collateral Trustee or to which the Collateral Trustee may be entitled
hereunder at any time or times.
(b) Any and all rights assigned herein may be further assigned by
the Collateral Trustee, including, without being limited to, assignments in
connection with the enforcement of the assignments made by this Assignment and
any subsequent holder of this Assignment shall succeed to and have all the
rights and powers of the Collateral Trustee under this Assignment.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE ISSUER
The Issuer hereby represents and warrants to the Collateral
Trustee as follows:
Section 3.01 Organization, Power and Status of the Issuer. The
Issuer (a) is a corporation duly formed, validly existing and in good standing
under the laws of the State of Delaware and (b) is duly authorized, to the
extent necessary, to do business in each jurisdiction where the character of
its properties or the nature of its activities makes such qualification
necessary. The Issuer has all requisite corporate power and authority to own
and operate the property it purports to own and to carry on its business as
now being conducted and as proposed to be conducted in respect of the Vessel.
Section 3.02 Authorization; Enforceability; Execution and
Delivery. (a) The Issuer has all necessary corporate power and authority
to execute, deliver and perform under this Assignment.
(b) All action on the part of the Issuer that is required for the
authorization, execution, delivery and performance of this Assignment has been
duly and effectively taken; and the execution, delivery and performance of
this Assignment does not require the approval or consent of any Person except
for such consents and approvals as have been obtained on or prior to the
Closing Date.
(c) This Assignment has been duly executed and delivered by the
Issuer. This Assignment constitutes the legal, valid and binding obligation
of the Issuer, enforceable against it in accordance with the terms thereof.
Section 3.03 No Conflicts; Laws and Consents; No Default. (a)
Neither the execution, delivery and performance of this Assignment nor the
consummation of any of the transactions contemplated hereby nor performance of
or compliance with the terms and conditions hereof (i) contravenes any
Requirement of Law applicable to the Issuer or (ii) constitutes a default
under any Security Document.
(b) The Issuer is in compliance with and not in default under any
and all Requirements of Law applicable to the Issuer and all terms and
provisions of this Assignment.
Section 3.04 Governmental Approvals. All Governmental Approvals
which are required to be obtained in the name of the Issuer in connection with
the execution, delivery and performance by the Issuer of this Assignment have
been obtained and are in effect on the Closing Date.
Section 3.05 Litigation. There are no actions, suits or
proceedings at law or in equity or by or before any Governmental Authority now
pending against the Issuer or, to the best of the Issuer's knowledge,
threatened against the Issuer or pending or threatened against any property or
other assets or rights of any of the Issuer with respect to this Assignment.
Section 3.06 No Prior Assignment. The Issuer has not assigned or
pledged, and hereby covenants that it will not assign or pledge, so long as
this Assignment shall remain in effect, the Initial Charter and the Assignment
of Charter or any part of the rights, titles and interests hereby assigned, to
anyone other than the Collateral Trustee, or its successors or assigns.
Section 3.07 The Assignment of Charter. The Assignment of Charter
constitutes the legal, valid and binding obligation of the Issuer and of the
Issuer as "Lender" thereunder and is in full force and effect in the form of
Exhibit "A" attached hereto; there are no amendments, additions, addenda or
modifications thereto; said Exhibit "A" represents the entirety of the
chartering and other arrangements referred to therein; and neither of the
parties thereto is in default thereunder.
ARTICLE IV
COVENANTS OF THE ISSUER
The Issuer hereby covenants and agrees that so long as any of the
Serial Mortgage Notes or Term Mortgage Notes remains outstanding:
Section 4.01 Consent of Initial Charterer and Owner. On the
Closing Date, the Issuer shall deliver to the Initial Charterer and the Owner
a copy of this Assignment and shall procure the execution by the Initial
Charterer and the Owner of the Consents and Acknowledgment set out in Exhibits
A-1 and A-2 hereto and deliver said Consents and Acknowledgment to the
Collateral Trustee on the Closing Date.
Section 4.02 Enforcement of Assignment of Charter. (a) The
Issuer will do or permit to be done each and every act or thing which the
Collateral Trustee may from time to time require to be done for the purpose
of enforcing the Collateral Trustee's rights under the Initial Charter, the
Assignment of Charter and this Assignment.
(b) If an Event of Default shall occur under either the Term
Indenture or the Serial Indenture, the Issuer shall procure that all moneys
hereby assigned or agreed to be assigned or arising from or in connection with
any of the rights, title, interest and benefits of the Issuer under the
Initial Charter and the Assignment of Charter shall be paid to the credit of
Account No. _____________ of the Collateral Trustee at Chemical Trust Company
of California, or to such other account as the Collateral Trustee may from
time to time direct.
(c) The Issuer will not exercise any right or powers conferred
on it by the Assignment of Charter in connection with any default or alleged
default by the Initial Charterer or Owner thereunder or under the Initial
Charter (including without limitation the right of termination and
substitution) unless and until requested so to do by the Collateral Trustee
whereupon the Issuer agrees that it will do so provided always that the
Collateral Trustee shall not be responsible in any way whatsoever in the event
that the exercise of any right or power (including the right of termination
and substitution) be thereafter adjudged improper or to constitute a
repudiation of the Assignment of Charter by the Issuer.
Section 4.03 Amendment of Assignment of Charter; Collateral
Assignment of Charter. (a) The Issuer will not, except with the previous
written consent of the Collateral Trustee, agree to any variation of the
Initial Charter or the Assignment of Charter or release the Owner or the
Initial Charterer from any of its obligations thereunder or waive any breach
of the Owner's obligations thereunder or under the Initial Charter or consent
to any such act or omission of the Owner or the Initial Charterer as would
otherwise constitute such breach.
(b) The Issuer will not, except with the previous written consent
of the Collateral Trustee, assign the Initial Charter or the Assignment of
Charter to any other Person.
Section 4.04 Performance of Obligations. The Issuer will perform
its obligations under the Assignment of Charter and use its best endeavors to
procure that the Owner shall perform its obligations under the Assignment of
Charter.
Section 4.05 Notices. The Issuer will send a copy of all notices
received or given by it under the Assignment of Charter forthwith to the
Collateral Trustee.
Section 4.06 Further Assurances. The Issuer will at any time and
from time to time, upon the written request of the Collateral Trustee,
promptly and duly execute and deliver any and all such further instruments and
documents and take such action as the Collateral Trustee may deem desirable in
order to obtain the full benefits of this Assignment and of the rights and
powers herein granted.
Section 4.07 Collateral Trustee as Attorney-in-Fact of Issuer. The
Issuer hereby constitutes the Collateral Trustee, and its successors and
assigns, its true and lawful attorney-in-fact, irrevocably, with full power in
its own name, in the name of its agents or nominees or in the name of its
agents or nominees or in the name of the Issuer or otherwise, to ask, require,
demand, receive, enforce and give acquittance for, any and all moneys and
claims for moneys due and to become due and payable under or arising out of
the Initial Charter or the Assignment of Charter, to endorse any checks or
other instruments or orders in connection therewith and to file any claims or
take any action or institute any proceedings which to the Collateral Trustee
may seem to be necessary or advisable under this Assignment. Any action or
proceeding brought by the Collateral Trustee pursuant to any of the provisions
of this Assignment or otherwise and any claim made by the Collateral Trustee
hereunder may be compromised, withdrawn or otherwise dealt with by the
Collateral Trustee without any notice to or approval of the Issuer.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01 Amendment. This Assignment may be amended from time
to time by written agreement signed by the parties hereto.
Section 5.02 Severability. If any provision of this Assignment is
held to be in conflict with any applicable statute or rule of law or is
otherwise held to be unenforceable for any reason whatsoever, such
circumstances shall not have the effect of rendering the provision in question
inoperative or unenforceable in any other case or circumstance, or of
rendering any other provision or provisions herein contained invalid,
inoperative, or unenforceable to any extent whatsoever. The invalidity of any
one or more phrases, sentences, clauses or Sections of this Assignment
contained, shall not affect the remaining portions of this Assignment, or any
part thereof.
Section 5.03 Notices. All demands, notices and communications
hereunder shall be in writing, personally delivered or mailed by certified
mail-return receipt requested, and shall be deemed to have been duly given
upon receipt (a) in the case of the Issuer, at the following address: c/o JH
Management Corporation, Room 6/9, One International Place, Boston,
Massachusetts 02110-2624, (b) in the case of the Collateral Trustee, at the
following address: ___________________________, or at other such address as
shall be designated by such party in a written notice to the other parties.
Section 5.04 Captions. The captions or headings in this
Assignment are for convenience only and in no way define, limit or describe
the scope or intent of any provisions or sections of this Assignment.
Section 5.05 Governing Law. This Assignment shall be governed by
and interpreted in accordance with the laws of the State of New York, without
giving effect to the principles of conflicts of law.
Section 5.06 No Partnership. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture among the parties
hereto and the services of each party shall be rendered as an independent
contractor and not as agent for any other party.
Section 5.07 Counterparts. This Assignment may be executed in any
number of counterparts and by different parties hereto on separate
counterpart, each of which shall be deemed to be an original. Such
counterparts shall constitute one and the same agreement.
Section 5.08 Survival. The representations, covenants and
agreements contained in or made pursuant to this Assignment in respect of
either party hereto shall survive the execution and delivery of this
Assignment and shall continue in effect so long as such party's obligations
hereunder remain outstanding.
Section 5.09 Integration. This Assignment and the Schedule and
Exhibits hereto constitute the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements, understandings or representations pertaining to the subject
matter hereof, whether oral or written. There are no warranties,
representations or other agreements between the parties in connection with the
subject matter hereof except as specifically set forth or incorporated herein.
Section 5.10 Reproduction of Documents. This Assignment and all
documents relating thereto, including, without limitation, (a) consents,
waivers and modifications which may hereafter be executed, (b) documents
received by any party at the closing, and (c) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made in the regular course
of business) and that any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence.
Section 5.11 Successors and Assigns; Assignment. This Assignment
shall be binding upon and inure to the benefit of the Issuer and the
Collateral Trustee and their respective successors and assigns. Neither the
Issuer nor the Collateral Trustee shall have the right to assign its rights
hereunder or any interest herein without the prior written consent of the
other party.
Section 5.12 General Interpretive Principles. For purposes of
this Assignment except as otherwise expressly provided or unless the
context otherwise requires:
(a) the defined terms in this Assignment shall include the
plural as well as the singular, and the use of any gender herein shall be
deemed to include any other gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles as in effect on the date hereof;
(c) references herein to "Articles", "Sections", "Subsections",
"paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, paragraphs and other subdivisions
of this Assignment;
(d) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to paragraphs and
other subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Assignment as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
Section 5.13 Effective Date of Transaction. Notwithstanding and
the fact that this Assignment is dated as of __________ 1, 1994, the
transactions set forth herein shall not be effective until the Closing Date.
IN WITNESS WHEREOF, the Issuer and the Collateral Trustee have
caused this Assignment to be duly executed and delivered by their respective
officers thereunto duly authorized all as of the day and year first above
written.
CALIFORNIA PETROLEUM TRANSPORT
CORPORATION, as Collateral Trustee
By:
Name:
Title:
CHEMICAL TRUST COMPANY OF CALIFORNIA, as Issuer
By:
Name:
Title:
Exhibit A-1
LETTER OF ACKNOWLEDGMENT
TO COLLATERAL ASSIGNMENT OF CHARTER
__________ __, 1994
CALIFORNIA PETROLEUM TRANSPORT
CORPORATION, as Lender
CHEMICAL TRUST COMPANY OF CALIFORNIA,
as Collateral Trustee
Dear Sirs:
The undersigned hereby consents to and acknowledges receipt of (i)
a signed copy of the Assignment of Charter (the "Assignment"), dated as of
__________ 1, 1994, between CalPetro Tankers (Bahamas I) Limited (the "Owner")
and yourselves as adequate notice of such assignment to California Petroleum
Transport Corporation (the "Lender") of the Initial Charter (as defined in the
Assignment) and of all the right, title and interest of the Owner in, to and
under the Initial Charter and (ii) a signed copy of the Collateral Assignment
of Charter (the "Collateral Assignment"), dated as of ______________, 1994,
between the Lender and Chemical Trust Company of California (the "Collateral
Trustee") as adequate notice of such further assignment to the Collateral
Trustee of the Initial Charter and all of the right, title and interest of the
Lender in, to and under the Initial Charter.
So long as the Assignment remains effective, we hereby agree that,
upon your notification to us of the occurrence of an Event of Default under
the Term Loan Agreement or Serial Loan Agreement referred to in the
Assignment, we shall pay any and all sums which we are legally obligated to
pay to the Owner or otherwise as stated in and according to the Initial
Charter directly to the Collateral Trustee's Account No. ________________, at
______________, or otherwise to such other account as you may at any time or
from time to time, designate by notice to us in writing.
Payments of moneys under the Initial Charter may be adjusted,
reduced or withheld only as expressly provided therein. Payments to the
Collateral Trustee shall not be subject to any right of set-off or defense by
way of counterclaim or otherwise which the undersigned may have against the
Owner or any entity substituted for it other than under the Initial Charter
and all payments once made to you will be final, and once paid we will not, for
any reason whatsoever, seek to recover any such payment made to the Collateral
Trustee by virtue of the Assignment, the Collateral Assignment or this Letter
of Consent.
We confirm that the terms of the Initial Charter remain in full
force and effect and constitute the entire agreement between the parties
thereto with respect to the Vessel and that the Owner is not presently in
breach of the terms of the Initial Charter. We further confirm that the terms
of the Initial Charter have not been varied or modified and that the terms of
the Initial Charter will not after the date hereof be varied or modified
without the prior written consent of the Collateral Trustee.
We confirm that we have received no prior notice of any assignment
by the Owner of any interest in the Initial Charter.
The undersigned will not permit any amendment, modification,
cancellation or other alteration in the Initial Charter, nor will it consent
to or accept the substitution thereunder of any party for the Owner without
your prior written consent.
CHEVRON TRANSPORT CORPORATION, as Initial
Charterer
By: _________________________
Name: _________________________
Title:_________________________
Exhibit A-2
LETTER OF ACKNOWLEDGMENT
TO COLLATERAL ASSIGNMENT OF CHARTER
__________ __, 1994
CHEMICAL TRUST COMPANY OF
CALIFORNIA, as Collateral Trustee
Dear Sirs:
The undersigned hereby consents to and acknowledges receipt of a
signed copy of the Collateral Assignment of Charter (the "Assignment"), dated
as of __________ 1, 1994, between California Petroleum Transport Corporation
(the "Issuer") and yourselves as adequate notice of such assignment to you of
the Assignment of Charter (as defined in the Assignment) and of all the right,
title and interest of the Issuer in, to and under the Assignment of Charter.
So long as the Assignment remains effective, we hereby agree that,
upon your notification to us of the occurrence of an Event of Default under
the Term Indenture or Serial Indenture referred to in the Assignment, we shall
pay any and all sums which we are legally obligated to pay to the Issuer or
otherwise as stated in and according to the Assignment of Charter directly to
your Account No. ________________, at ______________, or otherwise to such
other account as you may at any time or from time to time, designate by notice
to us in writing.
Payments of moneys under the Assignment of Charter may be
adjusted, reduced or withheld only as expressly provided therein. Payments to
you shall not be subject to any right of set-off or defense by way of
counterclaim or otherwise which the undersigned may have against the Issuer or
any entity substituted for it other than under the Assignment of Charter and
all payments once made to you will be final, and once paid we will not, for
any reason whatsoever, seek to recover any such payment made to you by virtue
of the Assignment or this Letter of Consent.
We confirm that the terms of the Assignment of Charter remain in
full force and effect and constitute the entire agreement between the parties
thereto with respect to the Vessel and that the Issuer is not presently in
breach of the terms of the Assignment of Charter. We further confirm that the
terms of the Assignment of Charter have not been varied or modified and that
the terms of the Assignment of Charter will not after the date hereof be
varied or modified without your prior written consent.
We confirm that we have received no prior notice of any assignment
by the Issuer of any interest in the Assignment of Charter.
The undersigned will not permit any amendment, modification,
cancellation or other alteration in the Assignment of Charter, nor will it
consent to or accept the substitution thereunder of any party for the Issuer
without your prior written consent.
CALPETRO TANKERS (BAHAMAS I) LIMITED, as Owner
By: _________________________
Name: _________________________
Title:_________________________
SCHEDULE 1
Defined Terms Used in the Assignment
"Assignment of Charter" means the assignment between the Issuer and the
Owner, as amended from time to time in accordance with the terms thereof,
pursuant to which the Owner assigns to the Issuer all of its right, title and
interest in, to and under the Initial Charter to secure its obligations under
the Loan Agreements.
"Assignment of Guarantee" means the assignment between the Owner and the
Issuer, as amended from time to time in accordance with the terms thereof,
pursuant to which the Owner assigns to the Issuer all of its right, title and
interest in, to and under the Chevron Guarantee to secure its obligations
under the Loan Agreements.
"Assignment of Mortgage" means the assignment of the Mortgage between
the Issuer and the Owner, as amended from time to time in accordance with the
terms thereof, pursuant to which the Issuer assigns to the Collateral Trustee
all of its right, title and interest in, to and under the Mortgage with
respect to secure its obligations under the Indentures.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in New York, New York, or in the city and state
where the Trustee's principal offices are located, are authorized or are
obligated by law, executive order or governmental decree to be closed.
"Chevron" means Chevron Corporation, a Delaware corporation.
"Chevron Guarantee" means the guarantee of the obligations of the
Initial Charterer under the Initial Charter given by Chevron.
"Closing Date" means __________ __, 1994.
"Collateral Assignment of Charter" means the assignment between the
Issuer and the Collateral Trustee, as amended from time to time in accordance
with the terms thereof, pursuant to which the Issuer assigns to the Collateral
Trustee all of its right, title and interest in, to and under the Assignment
of Charter to secure its obligations under the Indentures.
"Collateral Assignment of Guarantee" means the assignment between the
Issuer and the Collateral Trustee, as amended from time to time in accordance
with the terms thereof, pursuant to which the Issuer assigns to the Collateral
Trustee all of its right, title and interest in, to and under the Assignment
of Guarantee to secure its obligations under the Indentures.
"Collateral Trustee" means Chemical Trust Company of California.
"Event of Default" means an Event of Default under Section 4.01 of the
Indentures.
"Governmental Approval" means any authorization, consent, approval,
license, franchise, lease, ruling, permit, tariff, rate, certification,
exemption, filing or registration by or with any Governmental Authority
relating to the ownership of the Collateral or to the execution, delivery or
performance of any Security Document.
"Governmental Authority" means the federal government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any other governmental entity with authority over the Issuer
or operation of the Vessels.
"Indentures" means the Indenture, dated as of __________ 1, 1994 between
the Issuer and the Collateral Trustee pursuant to which the Term Mortgage
Notes will be issued and the Indenture, dated as of __________ 1, 1994 between
the Collateral Trustee and the Issuer pursuant to which the Serial Mortgage
Notes will be issued.
"Initial Charter" means with respect to each Vessel, the Bareboat
Charter, dated
_________, between the Initial Charterer and the Owner.
"Initial Charterer" means Chevron Transport Corporation, a Liberian
corporation.
"Issuer" means California Petroleum Transport Corporation, a corporation
organized under the laws of the State of Delaware.
"Law" means any statute, law, rule, regulation, ordinance, order, code,
policy or rule of common law, now or hereafter in effect, and any judicial or
administrative interpretation thereof by a Governmental Authority or
otherwise, including any judicial or administrative order, consent decree or
judgment.
"Mortgage" means, with respect to the Vessel, the first preferred ship
mortgages on the Vessel granted by the Owner to the Issuer, as amended from
time to time in accordance with the terms of such Mortgage.
"Owner" means CalPetro Tankers (Bahamas I) Limited, a company organized
under the laws of The Commonwealth of the Bahamas.
"Person" means an individual, a partnership, a corporation, a joint
venture, an unincorporated association, a joint-stock company, a trust, or
other entity or a government or any agency or political subdivision thereof.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or partnership agreement or other organizational or
governing documents of such Person, and, any Law applicable to or binding upon
such Person or any of its properties or to which such Person or any of its
properties is subject.
"Security Documents" means the Collateral Trust Agreement, the
Collateral Assignment of Charter, the Collateral Assignment of Guarantee, and
the Assignment of Mortgage, collectively.
"Serial Indenture" the Indenture, dated as of __________ 1, 1994 between
the Owner and the Issuer pursuant to which the Issuer issues the Serial
Mortgage Notes.
"Serial Mortgage Notes" means the Serial First Preferred Term Mortgage
Notes which will mature serially from _____________, 1995 to _____________,
2005 in the initial aggregate amount of $168,500,000 issued by the Issuer
concurrently with the issuance of the Term Mortgage Notes.
"Serial Obligations" means the payment, performance or obligations of
any kind or nature whatsoever of the Issuer under and pursuant to the Serial
Indenture, any Security Document and any instrument, agreement or document
referred to therein.
"State" means any state of the United States of America and, in
addition, the District of Columbia.
"Term Indenture" means the Term Indenture, dated as of __________ 1,
1994 between the Trustee and the Issuer pursuant to which the Issuer issues
the Term Mortgage Notes.
"Term Mortgage Notes" means __% First Preferred Mortgage Notes Due 2014
in the initial aggregate amount of $117,900,000 issued by the Issuer
concurrently with the issuance of the Serial Mortgage Notes.
"Term Obligations" means the payment, performance or obligations of any
kind or nature whatsoever of the Issuer under and pursuant to the Term
Indenture, any Security Document and any instrument, agreement or document
referred to therein.
"Trustee" means Chemical Trust Company of California.
"Vessel" shall have the meaning assigned to such term in the Preliminary
Statement of this Assignment.
______________________________________________________________________________
______________________________________________________________________________
EXHIBIT 4.12
California Petroleum Transport Corporation
and
CalPetro Tankers (Bahamas I) Limited
___________________________________
SERIAL LOAN AGREEMENT
Dated as of ________ 1, 1994
___________________________________
______________________________________________________________________________
______________________________________________________________________________
Table Of Contents
Page
____
ARTICLE I
DEFINITIONS
ARTICLE II
THE SERIAL LOANS
Section 2.01 The Serial Loans....................................... 1
Section 2.02 Tranches of the Serial Loans........................... 1
Section 2.03 Interest............................................... 2
Section 2.04 Repayment of Principal................................. 2
Section 2.05 Mandatory Prepayment of the Serial Loans............... 2
Section 2.06 Voluntary Prepayment of the Serial Loan................ 2
Section 2.07 Maximum Interest Rate.................................. 2
Section 2.08 Manner of Payment...................................... 3
Section 2.09 Intentionally Left Blank............................... 3
Section 2.10 Transfer of Loan Agreement............................. 3
Section 2.11 Joint and Several Obligation........................... 3
Section 2.12 Non-Recourse Obligations............................... 4
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE OWNER
Section 3.01 Organization, Power and Status of the Owner............ 4
Section 3.02 Authorization; Enforceability; Execution and Delivery.. 4
Section 3.03 No Conflicts; Laws and Consents; No Default............ 4
Section 3.04 Governmental Approvals................................. 5
Section 3.05 Litigation............................................. 5
Section 3.06 Taxes.................................................. 5
ARTICLE IV
Section 4.01 Condition Precedent.................................... 5
ARTICLE V
COVENANTS OF THE OWNER
Section 5.01 Payment of Principal and Interest; Payment of Taxes..... 5
Section 5.02 Corporate Existence..................................... 6
Section 5.03 Performance of Obligations.............................. 6
Section 5.04 Activities of the Owners................................ 6
Section 5.05 No Bankruptcy Petition.................................. 6
Section 5.06 Other Debt.............................................. 6
Section 5.07 Guarantees, Loans, Advances and Other Liabilities....... 7
Section 5.08 Consolidation, Merger and Sale of Assets................ 7
Section 5.09 Capital Expenditures.................................... 7
Section 5.10 Books and Records....................................... 7
Section 5.11 Restricted Payments..................................... 7
Section 5.12 Provision of Reports and Information.................... 7
ARTICLE VI
EVENTS OF DEFAULT; REMEDIES
Section 6.01 Events of Default....................................... 7
Section 6.02 Enforcement of Remedies................................. 8
Section 6.03 Acceleration of Serial Loans............................ 9
Section 6.04 Specific Remedies....................................... 9
Section 6.05 Rights and Remedies Cumulative.......................... 10
Section 6.06 Restoration of Rights and Remedies...................... 11
Section 6.07 Waiver of Past Defaults................................. 11
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.01 Amendment.............................................. 11
Section 7.02 Severability........................................... 11
Section 7.03 Notices................................................ 11
Section 7.04 Consent to Jurisdiction................................ 11
Section 7.05 Captions............................................... 12
Section 7.06 Governing Law.......................................... 12
Section 7.07 No Partnership......................................... 12
Section 7.08 Counterparts........................................... 12
Section 7.09 Survival............................................... 12
Section 7.10 Integration............................................ 12
Section 7.11 Reproduction of Documents.............................. 13
Section 7.12 Successors and Assigns; Assignment..................... 13
Section 7.13 General Interpretive Principles........................ 13
Section 7.14 Effective date of Transaction.......................... 14
Serial Loan Agreement, dated as of __________ 1, 1994 (the "Loan
Agreement"),
between California Petroleum Transport Corporation, a corporation organized
under the laws of the State of Delaware (the "Lender") and CalPetro Tankers
(Bahamas I) Limited, a company organized under the laws of The Commonwealth of
the Bahamas (the "Owner").
PRELIMINARY STATEMENT
The Owner has requested that the Lender make a series of loans to
the Owner in the aggregate principal amount equal to $____________
(collectively, the "Serial Loans"). Concurrently herewith, the Owner is
requesting that the Lender make a loan to the Owner in the aggregate principal
amount equal to $____________ (the "Term Loan"). The net proceeds of the
Serial Loans and the Term Loan will be used by the Owner to acquire the m.t.
_________ (the "Vessel") from Chevron Transport Corporation (the "Initial
Charterer"). The Vessel will be bareboat chartered to the Initial Charterer
pursuant to the Bareboat Charter (the "Initial Charter"), dated as of the date
hereof, between the Owner and the Initial Charterer. As collateral security
for its obligations hereunder, the Owner will assign, pledge, mortgage and
grant to the Lender a security interest in, inter alia, the Vessel, the
Initial Charter and the earnings and insurances of the Vessel.
The Lender is willing to make the Serial Loans to the Owner
pursuant to this Loan Agreement upon the terms and subject to the conditions
contained herein:
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and of other valuable consideration, receipt of
which is hereby acknowledged, the Owner and the Lender hereby agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this Loan Agreement shall have the
meanings assigned to such terms in Schedule 1 to this Loan Agreement, and the
definitions of such terms shall be equally applicable to both the singular and
plural forms of such terms.
ARTICLE II
THE SERIAL LOANS
Section 2.01 The Serial Loans. The Lender agrees upon the terms
and subject to the conditions hereof to make the Serial Loans to the Owner on
the Closing Date in the initial principal amount of $___________.
Section 2.02 Tranches of the Serial Loans. The Serial Loans shall
be made in eleven Tranches, each bearing the interest rate per annum, having a
stated maturity date and being made in the initial principal amount set forth
below opposite such Tranche:
Annual Stated
Interest Maturity Initial Principal
Tranches Rate Date Amount
________ ________ ________ _________________
Serial Loan Due 1995 ________, 1995 $
Serial Loan Due 1996 ________, 1996
Serial Loan Due 1997 ________, 1997
Serial Loan Due 1998 ________, 1998
Serial Loan Due 1999 ________, 1999
Serial Loan Due 2000 ________, 2000
Serial Loan Due 2001 ________, 2001
Serial Loan Due 2002 ________, 2002
Serial Loan Due 2003 ________, 2003
Serial Loan Due 2004 ________, 2004
Serial Loan Due 2005 ________, 2005
Section 2.03 Interest. Interest on the outstanding principal
balance of each Tranche of Serial Loan shall be payable at a rate per annum
(computed on the basis of the actual number of days elapsed over a year of 360
days) equal to the related Annual Interest Rate of such Tranche, payable in
arrears on each Payment Date. If the Owner shall default in the payment of
the principal of, or interest on the Serial Loans or any other amounts
becoming due thereunder, the Owner shall, on demand, pay interest on such
unpaid amounts, to the extent permitted by applicable law, during the Default
Period at a rate per annum equal to the Default Rate.
Section 2.04 Repayment of Principal. The outstanding principal
amount of each Tranche shall be payable in full on the Stated Maturity Date of
such Tranche.
Section 2.05 Mandatory Prepayment of the Serial Loans. In the
event the Vessel is a Total Loss, the Owner shall prepay the outstanding
principal balance of the Serial Loans on the Loss Date, together with an
amount equal to all accrued interest thereon to but not including the Loss
Date; provided, however, in the event the Total Loss Proceeds are in an amount
less than the sum of the outstanding principal balance of the Term Loan and
the Serial Loans, together with an amount equal to all accrued interest
thereon to but not including the Loss Date, then the Owner shall prepay the
outstanding principal balance of the Term Loan and the Serial Loans, together
with an amount equal to all accrued interest thereon to but not including the
Loss Date, pro rata, in accordance with their respective outstanding principal
balances.
Section 2.06 Voluntary Prepayment of the Serial Loans. The Serial
Loans are not subject to voluntary prepayment by the Owner.
Section 2.07 Maximum Interest Rate. Nothing herein shall require
the Owner to pay interest at a rate exceeding the maximum rate permissible by
applicable law. If the Annual Interest Rate payable by the Owner on any date
would exceed the maximum rate permissible by applicable law, the Annual
Interest Rate shall automatically be reduced to such maximum permitted amount.
Any interest actually received for any period in excess of such maximum
allowable amount for such period shall be deemed to have been applied as a
prepayment of the Serial Loans.
Section 2.08 Manner of Payment. (a) All payments due to the
Lender under this Loan Agreement shall be made without any reduction or
deduction whatsoever, including any reduction or deduction for any set-off,
recoupment or counterclaim.
(b) Whenever any payment to the Lender under this Loan Agreement
shall be due on a day other than a Business Day, the date of payment thereof
shall be extended to the next succeeding Business Day. If the date for any
payment under this Loan Agreement is extended, such payment shall bear
interest for such extended period at the applicable Annual Interest Rate.
(c) Any payment received by the Lender hereunder shall be
applied as follows: first, toward the payment of interest on overdue payments
at the Default Rate, then due and payable; second, toward the payment of all
interest then due and payable on the Serial Loans, pro rata, in accordance
with their respective outstanding principal balance; third, toward the payment
of the principal then due and payable on any Tranche of Serial Loan maturing
on the related Payment Date (or, if the payment relates to the mandatory
prepayment of the Serial Loans pursuant to Section 2.05, pro rata, in
accordance with the outstanding principal balance of the Serial Loans and Term
Loan then outstanding); and fourth, toward any unpaid expenses of the Lender
in connection with this Loan Agreement or any other Security Documents.
(d) Payment of sums due under the provisions of this Loan
Agreement shall be made by wire transfer to the Lender's nominated bank and
receipt of such wire transfer by such bank by 10:00 a.m. New York time on the
due date for payment.
Section 2.09 Intentionally Left Blank
Section 2.10 Transfer of Loan Agreement. This Loan Agreement, and
the right to receive all payments of principal, interest and any other amounts
hereunder, may be transferred by the Lender only upon surrender of this Loan
Agreement to the Owner (except to the Collateral Trustee pursuant to the
Collateral Trust Agreement). The Owner shall, upon such surrender,
accompanied by a written request of the Lender, execute and deliver in
replacement thereof a new Loan Agreement with the Lender's transferee.
Section 2.11 Joint and Several Obligation. In consideration of the
Other Owners agreeing to be jointly and severally liable with the Owner for
all the Owner's obligations and liabilities hereunder and under the Term Loan
Agreement, the Owner hereby covenants and agrees with the Lender that the
Owner will be jointly and severally liable with the Other Owners on the Other
Loans, but only to the extent of the proceeds received by the Lender (or the
Lender's successors and assigns) from the Lender's right, title and interest
in and to the Collateral.
Section 2.12 Non-Recourse Obligations. The Lender, and any
subsequent assignee or transferee of this Loan Agreement, hereby agrees that
the Owner has and shall have no personal liability or obligation with respect
to the payment of the Serial Loans, the Term Loan or the Other Loans, and that
the Serial Loans, the Term Loan and the Other Loans are payable solely from
the proceeds received by the Lender (or the Lender's successors and assigns)
from the Lender's right, title and interest in and to the Collateral.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE OWNER
The Owner hereby represents and warrants to the Lender as follows:
Section 3.01 Organization, Power and Status of the Owner. The
Owner (a) is a corporation duly formed, validly existing and in good standing
under the laws of The Bahamas and (b) is duly authorized, to the extent
necessary, to do business in each jurisdiction where the character of its
properties or the nature of its activities makes such qualification necessary.
The Owner has all requisite corporate power and authority to own and operate
the property it purports to own and to carry on its business as now being
conducted and as proposed to be conducted in respect of the Vessel.
Section 3.02 Authorization; Enforceability; Execution and Delivery.
(a) The Owner has all necessary corporate power and authority to execute,
deliver and perform under this Loan Agreement and each other Security Document
to which it is a party.
(b) All action on the part of the Owner that is required for the
authorization, execution, delivery and performance of this Loan Agreement and
each other Security Document to which it is a party, in each case has been
duly and effectively taken; and the execution, delivery and performance of
this Loan Agreement and each such other Security Document does not require the
approval or consent of any Person except for such consents and approvals as
have been obtained on or prior to the Closing Date.
(c) This Loan Agreement and each other Security Document to which
the Owner is a party has been duly executed and delivered by it. Each of this
Loan Agreement and each other Security Document to which the Owner is a party
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with the terms thereof.
Section 3.03 No Conflicts; Laws and Consents; No Default. (a)
Neither the execution, delivery and performance of this Loan Agreement and
each other Security Document to which the Owner is a party nor the
consummation of any of the transactions contemplated hereby or thereby nor
performance of or compliance with the terms and conditions hereof or thereof
(i) contravenes any Requirement of Law applicable to the Owner or any of the
Collateral, (ii) constitutes a default under any Security Document or (iii)
results in the creation or imposition of any Lien on any of the Collateral
(other than the Lien created by any of the Security Documents) or results in
the acceleration of any obligation.
(b) The Owner is in compliance with and not in default under any
and all Requirements of Law applicable to the Owner and all terms and
provisions of this Loan Agreement and all other Security Documents.
Section 3.04 Governmental Approvals. All Governmental Approvals
which are required to be obtained in the name of the Owner in connection with
(a) the construction, operation and maintenance of the Vessel and (b) the
execution, delivery and performance by the Owner of this Loan Agreement and
the Security Documents have been obtained and are in effect on the Closing
Date.
Section 3.05 Litigation. There are no actions, suits or
proceedings at law or in equity or by or before any Governmental Authority now
pending against the Owner or, to the best of the Owner's knowledge, threatened
against the Owner or pending or threatened against any property or other
assets or rights of any of the Owner with respect to this Loan Agreement and
any other Security Document.
Section 3.06 Taxes. The Owner has filed, or caused to be filed,
all tax and information returns that are required to have been filed by it in
any jurisdiction and has paid, or caused to be paid, all taxes shown to be due
and payable on such returns and all other taxes and assessments payable by it,
including, without limitation, any taxes payable by the Owner with respect to
its Vessel and its interest in the Initial Charter, to the extent the same
have become due and payable.
ARTICLE IV
Section 4.01 Condition Precedent. The obligation of the Lender to
make the Serial Loans hereunder is subject to the issuance of the Securities
by the Lender under the Indentures.
ARTICLE V
COVENANTS OF THE OWNER
The Owner hereby covenants and agrees that so long as any of this
Loan Agreement remains outstanding:
Section 5.01 Payment of Principal and Interest; Payment of Taxes.
(a) The Owner will duly and punctually pay the principal of and interest on
the Serial Loans in accordance with the terms of this Loan Agreement.
(b) The Owner will take all actions as are necessary to insure
that all taxes and governmental claims, if any, in respect of the Owner's
activities and assets are promptly paid.
Section 5.02 Corporate Existence. (a) The Owner will keep in full
effect its existence, rights and franchises as a corporation under the laws of
The Commonwealth of the Bahamas, and will obtain and preserve its
qualification as a foreign entity in each jurisdiction in which such
qualification is necessary to protect the validity and enforceability of this
Loan Agreement and any of the other Security Documents to which it is a party.
(b) The Owner shall not amend its Memorandum of Association or
Articles of Association without the prior written consent of the Lender.
Section 5.03 Performance of Obligations. The Owner will not take,
or fail to take, any action, and will use its best efforts not to permit any
action to be taken by others, which would release any Person from any of such
Person's covenants or obligations under any agreement or instrument included
in the Collateral, or which would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the validity or
effectiveness of, any such agreement or instrument, except as expressly
permitted in this Loan Agreement.
Section 5.04 Activities of the Owners. The Owner shall not engage
in any activities other than (i) to enter into, or become a party to, a
Purchase Agreement with the Initial Charterer for the Vessel, (ii) to register
the Vessel under and pursuant to the laws of the Registration Jurisdiction,
(iii) to enter into, or become a party to, the Initial Charter with the
Initial Charterer and any additional charters or contracts of affreightment
occasioned by the termination of the Initial Charter, (iv) to borrow the Term
Loan and the Serial Loans from the Lender and to become jointly and severally
liable with the Other Owners on the Other Loans, (v) to assign, grant,
transfer, pledge, mortgage or convey its Vessel and its freights and earnings
to the Lender, (vi) to enter into, perform its obligations under, and perform
any other activities contemplated by, the Loan Agreements, the Mortgage,
Initial Charter, the Assignment of Earnings and Insurances, the Assignment of
Charter, the Management Agreement, the Issue of One Debenture, the Assignment
of Management Agreement and the Assignment of Purchase Agreement and (vii) to
engage only in those activities, including the entering into performing and/or
delivering any and all applications, licenses, agreements, necessary, suitable
or convenient to accomplish the foregoing or incidental thereto or connected
therewith.
Section 5.05 No Bankruptcy Petition. The Owner shall not (i)
commence any case, proceeding or other action under any existing or future
bankruptcy, insolvency or similar law seeking to have an order for relief
entered with respect to it, or seeking reorganization, arrangement,
adjustment, wind-up, liquidation, dissolution, composition or other relief with
respect to it or its debts, (ii) seek appointment of a receiver, trustee,
custodian or other similar official for it or any part of its assets, (iii)
make a general assignment for the benefit of creditors, or (iv) take any
action in furtherance of, or consenting or acquiescing in, any of the
foregoing.
Section 5.06 Other Debt. The Owner shall not after the Closing
Date, contract for, create, incur, assume or suffer to exist any indebtedness
other than the Term Loan, except (i) trade payables and expense accruals
incurred in the ordinary course and which are incidental to the purposes
permitted pursuant to Section 5.04 hereof and (ii) indebtedness contemplated by
this Loan Agreement or any of the other Security Documents.
Section 5.07 Guarantees, Loans, Advances and Other Liabilities.
The Owner shall not make any loan or advance or credit to, or guarantee
(directly or indirectly or by an instrument having the effect of assuring
payment or performance on any obligation of another Person or such Person's
capability of so doing, or otherwise), endorse (except for the endorsement of
checks for collection or deposit) or otherwise become contingently liable,
directly or indirectly, in connection with the obligations, stock or dividends
of, or own, purchase, repurchase or acquire (or agree contingently to do so)
any stock, obligations or securities of, or any other interest in, or make any
capital contribution to, any other Person except the Owner's obligations as
co-obligor on a joint and several basis of the Other Loans.
Section 5.08 Consolidation, Merger and Sale of Assets. The Owner
shall not consolidate with, or merge with or into, any other Person or convey
or transfer to any Person all or any part of the Collateral.
Section 5.09 Capital Expenditures. The Owner shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(both realty and personalty) other than for the purchase of its Vessel.
Section 5.10 Books and Records. The Owner shall at all times keep
proper books and records of all of its business and financial affairs in
accordance with generally accepted accounting principles, as in effect on the
date hereof in the jurisdiction in which its chief executive office is
located. The Owner shall keep books of account or records concerning its
accounts, inventory, contract rights, equipment and proceeds at its offices
located at United House, 14-16 Nelson Street, Douglas, Isle of Man.
Section 5.11 Restricted Payments. The Owner shall not make any
Restricted Payment.
Section 5.12 Provision of Reports and Information. The Owner shall
provide to the Lender any and all information and reports required to be
furnished or provided by it pursuant to the Act.
ARTICLE VI
EVENTS OF DEFAULT; REMEDIES
Section 6.01 Events of Default. Any one or more of the following
events shall constitute an Event of Default:
(a) if the Owner shall default in the making of any payment of
all or any part of the principal of, interest on, or other amount or charge
due under this Loan Agreement, whether at the stated maturity thereof or at
any date fixed for payment by acceleration, by notice of prepayment or
otherwise, and the continuance of such default for a period of two Business
Days after the due date therefor;
(b) if the Owner shall default in the performance or observance
of any covenant contained in Sections 5.02, 5.03, 5.10 and 5.12 of this Loan
Agreement, and the continuance of such default for a period of 30 days after
written notice thereof by the Lender;
(c) if the Owner shall default in the performance or observance
of any covenant contained in Article V hereof (other than Sections 5.01, 5.02,
5.03, 5.10 and 5.12, of this Loan Agreement);
(d) if any representation or warranty made by the Owner herein,
in any Security Document or in any document or certificate furnished by the
Owner in connection herewith or therewith or pursuant hereto or thereto shall
at any time prove to have been false, incorrect or misleading in any material
respect at the time made or deemed to be made;
(e) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings, or for the winding-up or liquidation
of its affairs, shall have been entered against the Owner and such decree or
order shall have remained in force undischarged or unstayed for a period of
sixty (60) days;
(f) The Owner shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings of or relating to such party
or of or relating to all or substantially all of such party's property;
(g) The Owner shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(h) if an Event of Default as defined in the Mortgage shall
occur and be continuing.
Section 6.02 Enforcement of Remedies. After an Event of Default
shall have occurred and be continuing, then and in every such case the Lender
may exercise any or all of the rights and powers and pursue any and all of the
remedies pursuant to this Article and any of the other Security Documents, and
to the extent permitted by applicable law, may, provided the Lender pursuant
to Section 6.03 hereof shall have declared the unpaid principal amount of the
Serial Loans immediately due and payable, take possession of all or any part
of the Collateral and may exclude the Owner and all Persons claiming under it
wholly or partly therefrom.
Section 6.03 Acceleration of Serial Loans. Upon the occurrence and
during the continuance of an Event of Default hereunder, the Lender may
declare the unpaid principal amount of the Serial Loans, together with accrued
interest thereon to be immediately due and payable, upon which declaration
such principal amount and such accrued interest shall immediately become due
and payable without further act or notice of any kind.
Section 6.04 Specific Remedies. Upon the occurrence and during the
continuance of an Event of Default and provided that the Lender pursuant to
Section 6.03 hereof shall have declared the unpaid principal amount of the
Serial Loans immediately due and payable:
(a) At the request of the Lender, the Owner shall promptly
execute and deliver to the Lender such instruments and other documents as the
Lender may deem necessary or advisable to enable the Lender or an agent or
representative designated by the Lender, at such time or times and place or
places as the Lender may specify, to obtain possession of all or any part of
the Collateral to which possession the Lender shall at the time be entitled
hereunder. If the Owner shall for any reason fail to execute and deliver such
instruments and documents after such request by the Lender, the Lender may
obtain a judgment conferring on the Lender the right to such possession
immediately and requiring the Owner to deliver such instruments and documents
to the Lender, to the entry of which judgment the Owner hereby specifically
consents.
(b) The Lender may proceed to enforce the rights of the Lender
by directing payment to it of all monies payable under any agreement or
undertaking constituting a part of the Collateral, by proceedings in any court
of competent jurisdiction for the appointment of a receiver or for sale of all
or any part of the Collateral possession to which the Lender shall at the time
be entitled hereunder or for foreclosure of such Collateral, and by any other
action, suit, remedy or proceeding authorized or permitted by this Loan
Agreement or by law or by equity, and may file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the
claims of the Lender asserted or upheld in any bankruptcy, receivership or
other judicial proceedings.
(c) The Lender shall be entitled to set-off against and withdraw
all amounts constituting a part of the Collateral and to apply the same as
follows:
First: To the payment of all reasonable expenses and charges,
including the expenses of any taking, attorney's fees, court costs
and other expenses or advances made or incurred by the Lender in
connection with the ascertainment or protection of its rights and
the pursuance of its remedies hereunder or under any of the
Security Documents (including, without limitation, the reasonable
fees and disbursements of counsel);
Second: To the payment of all amounts due to the Lender in
respect of taxes, indemnities, fees, expenses, premiums, purchase
of liens or otherwise under the provisions hereof or under any of
the Security Documents;
Third: To the payment of interest on the Serial Loans and Term
Loan, pro rata, in accordance with their respective outstanding
balances;
Fourth: To the payment of principal on the Serial Loans and the
Term Loan, pro rata, in accordance with their respective
outstanding balances;
Fifth: To the payment of any amount due and owing under the Other
Loans, pro rata, in the event of an acceleration of the principal
amount of such Other Loans; and
Sixth: To the payment of any surplus thereafter remaining to the
Owner or whomsoever may be lawfully entitled thereto.
(d) Without limiting the foregoing, the Lender, its assigns and
its legal representatives shall have all the remedies of a secured party under
applicable law and such further remedies as from time to time may hereafter be
provided pursuant to such law for a secured party. In exercising its power of
sale, the Lender shall be entitled to add to the Serial Loans any and all of
the Lender's expenses. In exercising its power of sale under this Loan
Agreement, the Lender may sell such portion of the Collateral or any part
thereof, either as one unit or in separate units, all as the Lender may in its
discretion elect; and the Lender may so sell the aforesaid properties, rights
and interests or any part thereof either separately from or together with the
whole or any part of other property which may constitute security for any
obligation with respect to the Serial Loans, all as the Lender may in its
discretion elect.
Section 6.05 Rights and Remedies Cumulative. Each and every right,
power and remedy herein specifically given to the Lender under this Loan
Agreement shall be cumulative and shall be in addition to every other right,
power and remedy herein specifically given or now or hereafter existing at
law, in equity or by statute, and each and every right, power and remedy
whether specifically herein given or otherwise existing may be exercised from
time to time and as often and in such order as may be deemed expedient by the
Lender, and the exercise or the beginning of the exercise of any power or
remedy shall not be construed to be a waiver of the right to exercise at the
same time or thereafter any other right, power or remedy. No delay or
omission by the Lender in the exercise of any right, remedy or power or in the
pursuance of any remedy shall impair any such right, power or remedy or be
construed to be a waiver of any default on the part of the Owner or to be an
acquiescence therein.
Section 6.06 Restoration of Rights and Remedies. In case the
Lender shall have proceeded to enforce any right, power or remedy under this
Loan Agreement by foreclosure, entry or otherwise, and such proceedings shall
have been discontinued or abandoned for any reason or shall have been
determined adversely to the Lender, then and in every such case the Owner and
the Lender shall be restored to their former positions and rights hereunder
with respect to the Collateral, and all rights, remedies and powers of the
Lender shall continue as if no such proceedings had been taken.
Section 6.07 Waiver of Past Defaults. Any past default hereunder
with respect to the Serial Loans or its consequences may be waived by the
Lender. Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Loan Agreement; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.01 Amendment. This Loan Agreement may be amended from
time to time by written agreement signed by the parties hereto.
Section 7.02 Severability. If any provision of this Loan Agreement
is held to be in conflict with any applicable statute or rule of law or is
otherwise held to be unenforceable for any reason whatsoever, such
circumstances shall not have the effect of rendering the provision in question
inoperative or unenforceable in any other case or circumstance, or of
rendering any other provision or provisions herein contained invalid,
inoperative, or unenforceable to any extent whatsoever. The invalidity of any
one or more phrases, sentences, clauses or Sections of this Loan Agreement
contained, shall not affect the remaining portions of this Loan Agreement, or
any part thereof.
Section 7.03 Notices. All demands, notices and communications
hereunder shall be in writing, personally delivered or mailed by certified
mail-return receipt requested, and shall be deemed to have been duly given
upon receipt (a) in the case of the Lender, at the following address: c/o JH
Management Corporation, Room 6/9, One International Place, Boston, MA
02110-2624, (b) in the case of the Owner, at the following address: United
House, 14-16 Nelson Street, Douglas, Isle of Man, or at other such address as
shall be designated by such party in a written notice to the other parties.
Section 7.04 Consent to Jurisdiction. Any legal suit, action or
proceeding against the Owner arising out of or relating to this Loan
Agreement, or any transaction contemplated hereby, may be instituted in any
federal or state court in The City of New York, State of New York and the
Owner hereby waives any objection which it may now or hereafter have to the
laying of venue of any such suit, action or proceeding, and the Owner hereby
irrevocably submits to the jurisdiction of any such court in any such suit,
action or proceeding. The Owner hereby irrevocably appoints and designates CT
Corporation System, having an address at 1633 Broadway, New York, New York,
its true and lawful attorney-in-fact and duly authorized agent for the limited
purpose of accepting servicing of legal process and the Owner agrees that
service of process upon such party shall constitute personal service of
process on the Owner. The Owner shall maintain the designation and
appointment of such authorized agent until all amounts payable under this Loan
Agreement shall have been paid in full. If such agent shall cease to so act,
the Owner shall immediately designate and appoint another such agent
satisfactory to the Lender and shall promptly deliver to the Lender evidence
in writing of such other agent's acceptance of such appointment.
Section 7.05 Captions. The captions or headings in this Loan
Agreement are for convenience only and in no way define, limit or describe the
scope or intent of any provisions or sections of this Loan Agreement.
Section 7.06 Governing Law. This Loan Agreement shall be governed
by and interpreted in accordance with the laws of the State of New York,
without giving effect to the principles of conflicts of law.
Section 7.07 No Partnership. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture among the parties
hereto and the services of each party shall be rendered as an independent
contractor and not as agent for any other party.
Section 7.08 Counterparts. This Loan Agreement may be executed in
any number of counterparts and by different parties hereto on separate
counterpart, each of which shall be deemed to be an original. Such
counterparts shall constitute one and the same agreement.
Section 7.09 Survival. The representations, covenants and
agreements contained in or made pursuant to this Loan Agreement in respect of
either party hereto shall survive the execution and delivery of this Loan
Agreement and shall continue in effect so long as such party's obligations
hereunder remain outstanding.
Section 7.10 Integration. This Loan Agreement and the Schedule and
Exhibits hereto constitute the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements, understandings or representations pertaining to the subject
matter hereof, whether oral or written. There are no warranties,
representations or other agreements between the parties in connection with the
subject matter hereof except as specifically set forth or incorporated herein.
Section 7.11 Reproduction of Documents. This Loan Agreement and all
documents relating thereto, including, without limitation, (a) consents,
waivers and modifications which may hereafter be executed, (b) documents
received by any party at the closing, and (c) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made in the regular course
of business) and that any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence.
Section 7.12 Successors and Assigns; Assignment. This Loan
Agreement shall be binding upon and inure to the benefit of the Owner and the
Lender and their respective successors and assigns. The Owner shall not have
the right to assign its rights hereunder or any interest herein without the
prior written consent of the Lender. Subject to Section 2.10 hereof, the
Lender, at its sole option, shall have the right to assign this Loan
Agreement, the Security Documents and any of its rights and interest hereunder
and thereunder.
Section 7.13 General Interpretive Principles. For purposes of this
Loan Agreement except as otherwise expressly provided or unless the context
otherwise requires:
(a) the defined terms in this Loan Agreement shall include the
plural as well as the singular, and the use of any gender herein shall be
deemed to include any other gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles as in effect on the date hereof;
(c) references herein to "Articles", "Sections", "Subsections",
"paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, paragraphs and other subdivisions
of this Loan Agreement;
(d) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to paragraphs and
other subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Loan Agreement as a whole and not to any
particular provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
Section 7.14 Effective date of Transaction. Notwithstanding the
fact that this Loan Agreement is dated as of ________ 1, 1994, the
transactions set forth herein shall not be effective until the Closing Date.
IN WITNESS WHEREOF, the Owner and the Lender have caused this Loan
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized all as of the day and year first above written.
CALIFORNIA PETROLEUM TRANSPORT
CORPORATION, as Lender
By:
____________________________
Name:
____________________________
Title:
____________________________
CALPETRO TANKERS (BAHAMAS I) LIMITED, as Owner
By:
____________________________
Name:
____________________________
Title:
____________________________
SCHEDULE 1
Defined Terms Used in the Loan Agreement
"Act" means the United States Securities Act of 1933, as amended.
"Affiliate" means with respect to any Person, any other Person directly
or indirectly controlling, controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Annual Interest Rate" means the rate of interest per annum payable by
the Owner on the outstanding principal balance of each Tranche of Serial Loan
as set forth opposite such Tranche in Section 2.02 of the Loan Agreement.
"Assignment of Charter" means the assignment between the Owner and the
Lender, as amended from time to time in accordance with the terms thereof,
together with the documents contemplated thereby, pursuant to which the Owner
assigns to the Lender all of its right, title and interest in, to and under
the Initial Charter.
"Assignment of Earnings and Insurances" means the assignment between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner assigns to the Lender all of its
right, title and interest in, to and under the freights and hires (as well as
any charters entered into after the Closing Date) with respect to the Vessel.
"Assignment of Guarantee" means the assignment between the Owner and the
Lender, as amended from time to time in accordance with the terms thereof,
pursuant to which the Owner assigns to the Lender all of its right, title and
interest in, to and under the Chevron Guarantee.
"Assignment of Management Agreement" means the assignment between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner assigns to the Lender all of its
right, title and interest in, to and under the Management Agreement to secure
its obligations under the Loan Agreements.
"Assignment of Purchase Agreement" means the assignment between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner assigns to the Lender all of its
right, title and interest in, to and under the Purchase Agreement to secure
its obligations under the Loan Agreements.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in New York, New York, or in the city and state
where the Trustee's principal offices are located, are authorized or are
obligated by law, executive order or governmental decree to be closed.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in, or other equivalents (however designated
and whether voting or non-voting) of, such Person's capital stock, whether
outstanding on the Closing Date or issued after the Closing Date, and any and
all rights, warrants or options exchangeable for or convertible into such
capital stock.
"Chevron" means Chevron Corporation, a Delaware corporation.
"Chevron Guarantee" means the guarantee of the obligations of the
Initial Charterer under the Initial Charter given by Chevron.
"Closing Date" means _________, 1994.
"Code" means the United States Internal Revenue Code of 1986 and the
corresponding provisions of any successor statute.
"Collateral" means (i) an assignment of the Initial Charter, (ii) a
mortgage on the Vessel, (iii) an assignment of the earnings and insurances on
the Vessel, (iv) an assignment of the Chevron Guarantee, (v) an assignment of
the Management Agreement relating to the Vessel, (vi) an assignment of the
Purchase Agreement, (vii) the pledge of the shares of the Owner by the Owner's
shareholder and (vii) a blanket security interest on all of the assets of the
Owner now existing or hereafter created, together with all income and proceeds
thereof.
"Collateral Trust Agreement" means the collateral trust agreement, dated
as of the date hereof, among the Lender, the Collateral Trustee and the
Trustee.
"Collateral Trustee" means Chemical Trust Company of California, not in
its individual capacity but solely as indenture trustee under the Collateral
Trust Agreement.
"Compulsory Acquisition" means requisition for title or other compulsory
acquisition of the Vessel (otherwise than by requisition for hire), capture,
seizure, detention or confiscation of the Vessel by any other government or by
Persons acting or purporting to act on behalf of any government or
governmental authority.
"Default Period" means the period commencing the date any payment
hereunder was due to but not including the date such payment is paid in full.
"Default Rate" means a rate per annum for each day during the Default
Period until such payment shall be paid in full equal to 1.50% above LIBOR at
the commencement of such period.
"Event of Default" means an Event of Default under Section 6.01 of the
Loan Agreement.
"Governmental Approval" means any authorization, consent, approval,
license, franchise, lease, ruling, permit, tariff, rate, certification,
exemption, filing or registration by or with any Governmental Authority
relating to the ownership of the Collateral or to the execution, delivery or
performance of the Loan Agreement or any Security Document.
"Governmental Authority" means the federal government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any other governmental entity with authority over the Owner
or operation of the Vessels.
"Indentures" means the Indenture, dated as of ____________, ___ between
the Lender and the Trustee pursuant to which the Term Mortgage Notes will be
issued and the Indenture, dated as of _____________, ___ between the Lender
and the Trustee pursuant to which the Serial Mortgage Notes will be issued.
"Initial Charter" means with respect to each Vessel, the Bareboat
Charter, dated _________, between the Initial Charterer and the Owner.
"Initial Charterer" means Chevron Transport Corporation, a Liberian
corporation.
"Issue of One Debenture" means each Issue of One Debenture between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner grants to the Lender a security
interest in all of its assets.
"Law" means any statute, law, rule, regulation, ordinance, order, code,
policy or rule of common law, now or hereafter in effect, and any judicial or
administrative interpretation thereof by a Governmental Authority or
otherwise, including any judicial or administrative order, consent decree or
judgment.
"Lender" means California Petroleum Transport Corporation, a corporation
organized under the laws of the State of Delaware, together with its
successors and assigns.
"LIBOR" means the rate calculated on the basis of the offered rates
for deposits in dollars for a one-month period which appear on the Reuters
Screen LIBO Page as of 11:00 A.M., London time, on the date that is two
London Banking Days preceding the date of calculation. If at least two
such offered rates appear on the Reuters Screen LIBO Page, LIBOR will be
the arithmetic mean of such offered rates (rounded to the nearest .0001
percentage point). If, at any time of determination, the Reuters Screen
LIBO Page is not available, LIBOR will be calculated as the average
(rounded upward, if necessary, to the next higher 1/16 of 1%) of the
respective ratio per annum at which deposits in dollars for a one month
period are offered to each of three reference banks in the London interbank
market at approximately 11:00 A.M., London time, on the date that is two
London Banking Days preceding the date of calculation. Each of the Initial
Charterer and the Collateral Trustee (as assignee of the Owner) will select
a reference bank and the third reference bank will be selected by the
Initial Charterer and the Collateral Trustee together or, failing
agreement, by the previously selected reference banks together.
"Loan Agreement" means this Serial Loan Agreement, dated as of ______ 1,
1994, between the Owner and the Lender.
"Loan Agreements" means, collectively, this Loan Agreement and the Term
Loan Agreement, dated the date hereof, between the Owner and the Lender
wherein the Lender makes Term Loan to the Owner.
"London Banking Day" means any day on which dealings in deposits in
United States dollars are carried on in the London interbank market and on
which commercial banks are open for domestic and international business
(including dealings in United States dollar deposits) in London and New York.
"Lien" means any mortgage, lien (statutory or other), pledge, charge,
security interest, encumbrance, claim, hypothecation, assignment for security,
deposit arrangement or preference or other security agreement of any kind or
nature whatsoever. For purposes of the Loan Agreement, a Person shall be
deemed to own subject to a Lien any property which it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement.
"Loss Date" means the date which is 90 days after the occurrence of a
Total Loss of the Vessel.
"Management Agreement" means the agreement, dated the Closing Date,
among the Owner, the Manager and the Technical Advisor.
"Manager" means the Person performing the duties of the Manager under
the Management Agreement, initially P.D. Gram & Co. ans.
"Mortgage" means, with respect to the Vessel, the first preferred ship
mortgages on the Vessel granted by the Owner to the Lender, as amended from
time to time in accordance with the terms of such Mortgage.
"Other Owners" means Calpetro Tankers (Bahamas II) Limited, Calpetro
Tankers (Bahamas III) Limited and Calpetro Tankers (IOM) Limited.
"Other Loans" means each of the loans from California Petroleum
Transport Corporation to each of the Other Owners made on the Closing Date,
having an aggregate initial principal amount of $______________..
"Owner" means CalPetro Tankers (Bahamas I) Limited, a company organized
under The Commonwealth of the Bahamas.
"Payment Date" means each ________ and ______________ commencing
___________ 1995.
"Person" means an individual, a partnership, a corporation, a joint
venture, an unincorporated association, a joint-stock company, a trust, or
other entity or a government or any agency or political subdivision thereof.
"Purchase Agreement" means the Vessel Purchase Agreement, dated as of
_________________, between the Owner and the Initial Charterer wherein the
Owner purchases the Vessel from the Initial Charterer.
"Rating Agencies" means Moody's Investors Service, Inc., Standard &
Poor's Rating Group and Duff & Phelps Credit Rating Co.
"Registration Jurisdiction" means the jurisdiction in which the Vessel
is or will be registered.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or partnership agreement or other organizational or
governing documents of such Person, and, any Law applicable to or binding upon
such Person or any of its properties or to which such Person or any of its
properties is subject.
"Restricted Payment" means any of the following: (i) the declaration or
payment of any dividend or any other distribution on Capital Stock of the
Owner or any payment made to the direct or indirect holders (in their
capacities as such) of Capital Stock of the Owner (other than dividends or
distributions payable solely in Capital Stock or in options, warrants or other
rights to purchase Capital Stock, (ii) the purchase, redemption or other
acquisition or retirement for value of any Capital Stock of the Owner and
(iii) the making of any loans or advances to any Affiliate of the Owner.
"Securities" means, collectively, the Term Mortgage Notes and the Serial
Mortgage Notes.
"Security Documents" means the Loan Agreement, the Mortgage, the
Assignment of Charter, the Assignment of Earnings and Insurances, the
Assignment of Guarantee, the Assignment of Management Agreement, the Issue of
One Debenture, collectively.
"Serial Loans" shall have the meaning assigned to such term in the
Preliminary Statement of this Loan Agreement.
"Serial Mortgage Notes" means the Serial First Preferred Term Mortgage
Notes which will mature serially from _____________, 1995 to _____________,
2005 in the initial aggregate amount of $168,500,000 issued by the Lender
concurrently with the issuance of the Term Mortgage Notes.
"Stated Maturity Date" means, with respect to each Tranche of Serial
Loans, the Payment Date on which the outstanding principal balance of such
Tranche of Serial Loans is due and payable without giving effect to
redemption, prepayment or acceleration that is permitted or required pursuant
to the terms of the Loan Agreement. The Stated Maturity Date of each Tranche
of Serial Loans is set forth opposite such Tranche in Section 2.02 of the Loan
Agreement; provided however, that if a Total Loss occurs with respect to the
Vessel in the thirty (30) day period immediately preceding the Stated Maturity
Date, the Stated Maturity Date of the Allocated Principal Balance of such Lost
Vessel shall be the thirty-fifth Business Day after the date on which such
Total Loss occurred.
"Technical Adviser" means the Person performing the duties of the
Technical Adviser under the Management agreement, initially Barber Ship
Management Group.
"Term Loan" shall have the meaning assigned to such term in the
Preliminary Statement of this Loan Agreement.
"Term Mortgage Notes" means __% First Preferred Mortgage Notes Due 2014
in the initial aggregate amount of $117,900,000 issued by the Lender
concurrently with the issuance of the Serial Mortgage Notes.
"Total Loss" means either (a) an actual or constructive or compromised
or arranged total loss of the Vessel, (b) a Compulsory Acquisition of the
Vessel or (c) if so declared by the Initial Charterer at any time and in its
sole discretion, a requisition for hire of the Vessel for a period in excess
of 180 days.
"Total Loss Proceeds" means all compensation, damages and other payments
(including insurance proceeds other than certain liability insurance proceeds)
received by the Trustee from any Person, including any governmental authority,
with respect to or in connection with a Total Loss.
"Tranche" means the tranches in which the Serial Loans are made pursuant
to the terms of the Loan Agreement.
"Trustee" means Chemical Trust Company of California, not in its
individual capacity but solely as indenture trustee under the Indentures.
"Vessel" shall have the meaning assigned to such term in the Preliminary
Statement of this Loan Agreement.
______________________________________________________________________________
______________________________________________________________________________
California Petroleum Transport Corporation
and
CalPetro Tankers (Bahamas I) Limited
___________________________________
TERM LOAN AGREEMENT
Dated as of ________ 1, 1994
___________________________________
______________________________________________________________________________
______________________________________________________________________________
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
ARTICLE II
THE TERM LOAN
Section 2.01 The Term Loan............................................ 1
Section 2.02 Interest................................................. 1
Section 2.03 Repayment of Principal................................... 2
Section 2.04 Mandatory Prepayment of the Term Loan.................... 2
Section 2.05 Voluntary Prepayment of the Term Loan.................... 2
Section 2.06 Maximum Interest Rate.................................... 2
Section 2.07 Manner of Payment........................................ 2
Section 2.09 Transfer of Loan Agreement............................... 3
Section 2.10 Joint and Several Obligation............................. 3
Section 2.11 Non-Recourse Obligations................................. 3
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE OWNER
Section 3.01 Organization, Power and Status of the Owner.............. 4
Section 3.02 Authorization; Enforceability; Execution and Delivery.... 4
Section 3.03 No Conflicts; Laws and Consents; No Default.............. 4
Section 3.04 Governmental Approvals................................... 5
Section 3.05 Litigation............................................... 5
Section 3.06 Taxes.................................................... 5
ARTICLE IV
CONDITION PRECEDENT
Section 4.01 Condition Precedent...................................... 5
ARTICLE V
COVENANTS OF THE OWNER
Section 5.01 Payment of Principal and Interest; Payment of Taxes...... 5
Section 5.02 Corporate Existence...................................... 5
Section 5.03 Performance of Obligations............................... 6
Section 5.04 Activities of the Owners................................. 6
Section 5.05 No Bankruptcy Petition................................... 6
Section 5.06 Other Debt............................................... 6
Section 5.07 Guarantees, Loans, Advances and Other Liabilities........ 7
Section 5.08 Consolidation, Merger and Sale of Assets................. 7
Section 5.09 Capital Expenditures..................................... 7
Section 5.10 Books and Records........................................ 7
Section 5.11 Restricted Payments...................................... 7
Section 5.12 Acceptable Replacement Charter........................... 7
Section 5.13 Provision of Reports and Information..................... 8
ARTICLE VI
EVENTS OF DEFAULT; REMEDIES
Section 6.01 Events of Default........................................ 8
Section 6.02 Enforcement of Remedies.................................. 9
Section 6.03 Acceleration of Term Loan................................ 9
Section 6.04 Specific Remedies........................................ 10
Section 6.05 Rights and Remedies Cumulative........................... 11
Section 6.06 Restoration of Rights and Remedies....................... 11
Section 6.07 Waiver of Past Defaults.................................. 11
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.01 Amendment................................................ 12
Section 7.02 Severability............................................. 12
Section 7.03 Notices.................................................. 12
Section 7.04 Consent to Jurisdiction.................................. 12
Section 7.05 Captions................................................. 13
Section 7.06 Governing Law............................................ 13
Section 7.07 No Partnership........................................... 13
Section 7.08 Counterparts............................................. 13
Section 7.09 Survival................................................. 13
Section 7.10 Integration.............................................. 13
Section 7.11 Reproduction of Documents................................ 13
Section 7.12 Successors and Assigns; Assignment....................... 13
Section 7.13 General Interpretive Principles.......................... 14
Section 7.14 Effective Date of Transaction............................ 14
Term Loan Agreement, dated as of _________ 1, 1994 (the "Loan
Agreement"), between California Petroleum Transport Corporation, a
corporation organized under the laws of the State of Delaware (the
"Lender") and CalPetro Tankers (Bahamas I) Limited, a company organized
under the laws of The Commonwealth of the Bahamas (the "Owner").
PRELIMINARY STATEMENT
The Owner has requested that the Lender make a loan to the Owner
in the aggregate principal amount equal to $____________ (the "Term Loan").
Concurrently herewith, the Owner is requesting that the Lender make a series
of loans to the Owner in the aggregate principal amount equal to $____________
(collectively, the "Serial Loans"). The net proceeds of the Serial Loans and
the Term Loan will be used by the Owner to acquire the m.t. _________ (the
"Vessel") from Chevron Transport Corporation (the "Initial Charterer"). The
Vessel will be bareboat chartered to the Initial Charterer pursuant to the
Bareboat Charter (the "Initial Charter"), dated as of the date hereof, between
the Owner and the Initial Charterer. As collateral security for its
obligations hereunder, the Owner will assign, pledge, mortgage and grant to
the Lender a security interest in, inter alia, the Vessel, the Initial Charter
and the earnings and insurances of the Vessel.
The Lender is willing to make the Term Loan to the Owner pursuant
to this Loan Agreement upon the terms and subject to the conditions contained
herein:
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and of other valuable consideration, receipt of
which is hereby acknowledged, the Owner and the Lender hereby agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this Loan Agreement shall have the
meanings assigned to such terms in Schedule 1 to this Loan Agreement, and the
definitions of such terms shall be equally applicable to both the singular and
plural forms of such terms.
ARTICLE II
THE TERM LOAN
Section 2.01 The Term Loan. The Lender agrees upon the terms and
subject to the conditions hereof to make the Term Loan to the Owner on the
Closing Date in the initial principal amount of $___________.
Section 2.02 Interest. Interest on the outstanding principal
balance of the Term Loan shall be payable at a rate per annum (computed on the
basis of the actual number of days elapsed over a year of 360 days) equal to
the ___% (the "Interest Rate"). Interest shall be payable in arrears on each
Payment Date. If the Owner shall default in the payment of the principal of,
or interest on the Term Loan or any other amounts becoming due thereunder, the
Owner shall, on demand, pay interest on such unpaid amounts, to the extent
permitted by applicable law, during the Default Period at a rate per annum
equal to the Default Rate.
Section 2.03 Repayment of Principal. Principal on the Term Loan
shall be payable on each Payment Date commencing the First Principal Payment
Date in the amounts set forth in Schedule 2 set forth hereto; provided,
however, if the Initial Charterer terminates the Initial Charter on an
Optional Termination Date, then Principal on the Term Loan shall be payable on
each Payment Date commencing the First Principal Payment Date in the amounts
set forth in Schedule 3-A, Schedule 3-B, Schedule 3-C and Schedule 3-D, as
applicable.
Section 2.04 Mandatory Prepayment of the Term Loan. (a) In the
event the Vessel is a Total Loss, the Owner shall prepay the outstanding
principal balance of the Term Loan on the Loss Date, together with an amount
equal to all accrued interest thereon to but not including the Loss Date;
provided, however, in the event the Total Loss Proceeds are in an amount less
than the sum of the outstanding principal balance of the Term Loan and the
Serial Loans, together with an amount equal to all accrued interest thereon to
but not including the Loss Date, then the Owner shall prepay the outstanding
principal balance of the Term Loan and the Serial Loans, together with an
amount equal to all accrued interest thereon to but not including the Loss
Date, pro rata, in accordance with their respective outstanding principal
balances.
(b) In the event the Vessel is sold pursuant to Section 5.12,
the Owner shall use the entire net proceeds of such sale to prepay the
outstanding principal balance of the Term Loan. Such prepayment shall be in
full and complete satisfaction of the Owner's obligations hereunder.
Section 2.05 Voluntary Prepayment of the Term Loan. The Term Loan
is not subject to voluntary prepayment by the Owner prior to ________, 2005.
Thereafter, with the prior written consent of the Lender, the Owner may prepay
the Term Loan, in whole or in part, together with all interest accrued and
unpaid thereon.
Section 2.06 Maximum Interest Rate. Nothing herein shall require
the Owner to pay interest at a rate exceeding the maximum rate permissible by
applicable law. If the Interest Rate payable by the Owner on any date would
exceed the maximum rate permissible by applicable law, the Interest Rate shall
automatically be reduced to such maximum permitted amount. Any interest
actually received for any period in excess of such maximum allowable amount
for such period shall be deemed to have been applied as a prepayment of
principal of the Term Loan.
Section 2.07 Manner of Payment. (a) All payments due to the
Lender under this Loan Agreement shall be made without any reduction or
deduction whatsoever, including any reduction or deduction for any set-off,
recoupment or counterclaim.
(b) Whenever any payment to the Lender under this Loan Agreement
shall be due on a day other than a Business Day, the date of payment thereof
shall be extended to the next succeeding Business Day. If the date for any
payment under this Loan Agreement is extended, such payment shall bear
interest for such extended period at the applicable Interest Rate.
(c) Any payment received by the Lender hereunder shall be
applied as follows: first, toward the payment of interest on overdue payments
at the Default Rate, then due and payable; second, toward the payment of all
interest then due and payable on the Term Loan; third, toward the payment of
the principal then due and payable on the Term Loan due on the related Payment
Date (or, if the payment relates to the mandatory prepayment of the Term Loan
pursuant to Section 2.04, pro rata, in accordance with the outstanding
principal balance of the Term Loan and the Serial Loans then outstanding); and
fourth, toward any unpaid expenses of the Lender in connection with this Loan
Agreement or any other Security Documents.
(d) Payment of sums due under the provisions of this Loan
Agreement shall be made by wire transfer to the Lender's nominated bank and
receipt of such wire transfer by such bank by 10:00 a.m. New York time on the
due date for payment.
Section 2.09 Transfer of Loan Agreement. This Loan Agreement, and
the right to receive all payments of principal, interest and any other amounts
hereunder, may be transferred by the Lender only upon surrender thereof of
this Loan Agreement to the Owner (except to the Collateral Trustee pursuant to
the Collateral Trust Agreement). The Owner shall, upon such surrender,
accompanied by a written request of the Lender, execute and deliver in
replacement thereof a new Loan Agreement with the Lender's transferee.
Section 2.10 Joint and Several Obligation. In consideration of
the Other Owners agreeing to be jointly and severally liable with the Owner
for all the Owner's obligations and liabilities hereunder and under the Serial
Loan Agreement, the Owner hereby covenants and agrees with the Lender that the
Owner will be jointly and severally liable with the Other Owners on the Other
Loans, but only to the extent of the proceeds received by the Lender (or the
Lender's successors and assigns) from the Lender's right, title and interest
in and to the Collateral.
Section 2.11 Non-Recourse Obligations. The Lender, and any
subsequent assignee or transferee of this Loan Agreement, hereby agrees that
the Owner has and shall have no personal liability or obligation with respect
to the payment of the Term Loan, the Serial Loans or the Other Loans, and that
the Term Loan, the Serial Loans and the Other Loans are payable solely from
the proceeds received by the Lender (or the Lender's successors and assigns)
from the Lender's right, title and interest in and to the Collateral.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE OWNER
The Owner hereby represents and warrants to the Lender as follows:
Section 3.01 Organization, Power and Status of the Owner. The
Owner (a) is a corporation duly formed, validly existing and in good standing
under the laws of The Bahamas and (b) is duly authorized, to the extent
necessary, to do business in each jurisdiction where the character of its
properties or the nature of its activities makes such qualification necessary.
The Owner has all requisite corporate power and authority to own and operate
the property it purports to own and to carry on its business as now being
conducted and as proposed to be conducted in respect of the Vessel.
Section 3.02 Authorization; Enforceability; Execution and Delivery.
(a) The Owner has all necessary corporate power and authority to execute,
deliver and perform under this Loan Agreement and each other Security Document
to which it is a party.
(b) All action on the part of the Owner that is required for the
authorization, execution, delivery and performance of this Loan Agreement and
each other Security Document to which it is a party, in each case has been
duly and effectively taken; and the execution, delivery and performance of
this Loan Agreement and each such other Security Document does not require the
approval or consent of any Person except for such consents and approvals as
have been obtained on or prior to the Closing Date.
(c) This Loan Agreement and each other Security Document to which
the Owner is a party has been duly executed and delivered by it. Each of this
Loan Agreement and each other Security Document to which the Owner is a party
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with the terms thereof.
Section 3.03 No Conflicts; Laws and Consents; No Default. (a)
Neither the execution, delivery and performance of this Loan Agreement and
each other Security Document to which the Owner is a party nor the
consummation of any of the transactions contemplated hereby or thereby nor
performance of or compliance with the terms and conditions hereof or thereof
(i) contravenes any Requirement of Law applicable to the Owner or any of the
Collateral, (ii) constitutes a default under any Security Document or (iii)
results in the creation or imposition of any Lien on any of the Collateral
(other than the Lien created by any of the Security Documents) or results in
the acceleration of any obligation.
(b) The Owner is in compliance with and not in default under any
and all Requirements of Law applicable to the Owner and all terms and
provisions of this Loan Agreement and all other Security Documents.
Section 3.04 Governmental Approvals. All Governmental Approvals
which are required to be obtained in the name of the Owner in connection with
(a) the construction, operation and maintenance of the Vessel and (b) the
execution, delivery and performance by the Owner of this Loan Agreement and
the Security Documents have been obtained and are in effect on the Closing
Date.
Section 3.05 Litigation. There are no actions, suits or
proceedings at law or in equity or by or before any Governmental Authority now
pending against the Owner or, to the best of the Owner's knowledge, threatened
against the Owner or pending or threatened against any property or other
assets or rights of any of the Owner with respect to this Loan Agreement and
any other Security Document.
Section 3.06 Taxes. The Owner has filed, or caused to be filed,
all tax and information returns that are required to have been filed by it in
any jurisdiction and has paid, or caused to be paid, all taxes shown to be due
and payable on such returns and all other taxes and assessments payable by it,
including, without limitation, any taxes payable by the Owner with respect to
its Vessel and its interest in the Initial Charter, to the extent the same
have become due and payable.
ARTICLE IV
CONDITION PRECEDENT
Section 4.01 Condition Precedent. The obligation of the Lender to
make the Term Loan hereunder is subject to the issuance of the Securities by
the Lender under the Indentures.
ARTICLE V
COVENANTS OF THE OWNER
The Owner hereby covenants and agrees that so long as this Loan
Agreement remains outstanding:
Section 5.01 Payment of Principal and Interest; Payment of Taxes.
(a) The Owner will duly and punctually pay the principal of and interest on
the Term Loan in accordance with the terms of this Loan Agreement.
(b) The Owner will take all actions as are necessary to insure
that all taxes and governmental claims, if any, in respect of the Owner's
activities and assets are promptly paid.
Section 5.02 Corporate Existence. (a) The Owner will keep in full
effect its existence, rights and franchises as a corporation under the laws of
The Commonwealth of the Bahamas, and will obtain and preserve its
qualification as a foreign entity in each jurisdiction in which such
qualification is necessary to protect the validity and enforceability of this
Loan Agreement and any of the other Security Documents to which it is a party.
(b) The Owner shall not amend its Memorandum of Association or
Articles of Association without the prior written consent of the Lender.
Section 5.03 Performance of Obligations. The Owner will not take,
or fail to take, any action, and will use its best efforts not to permit any
action to be taken by others, which would release any Person from any of such
Person's covenants or obligations under any agreement or instrument included
in the Collateral, or which would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the validity or
effectiveness of, any such agreement or instrument, except as expressly
permitted in this Loan Agreement.
Section 5.04 Activities of the Owners. The Owner shall not engage
in any activities other than (i) to enter into, or become a party to, a
Purchase Agreement with the Initial Charterer for the Vessel, (ii) to register
the Vessel under and pursuant to the laws of the Registration Jurisdiction,
(iii) to enter into, or become a party to, the Initial Charter with the
Initial Charterer and any additional charters or contracts of affreightment
occasioned by the termination of the Initial Charter, (iv) to borrow the Term
Loan and the Serial Loans from the Lender and to become jointly and severally
liable with the Other Owners on the Other Loans, (v) to assign, grant,
transfer, pledge, mortgage or convey its Vessel and its freights and earnings
to the Lender, (vi) to enter into, perform its obligations under, and perform
any other activities contemplated by, the Loan Agreements, the Mortgage, the
Initial Charter, the Assignment of Earnings and Insurances, the Assignment of
Charter, the Management Agreement, the Issue of One Debenture, the Assignment
of Management Agreement and the Assignment of Purchase Agreement and (vii) to
engage only in those activities, including the entering into performing and/or
delivering any and all applications, licenses, agreements, necessary, suitable
or convenient to accomplish the foregoing or incidental thereto or connected
therewith.
Section 5.05 No Bankruptcy Petition. The Owner shall not (i)
commence any case, proceeding or other action under any existing or future
bankruptcy, insolvency or similar law seeking to have an order for relief
entered with respect to it, or seeking reorganization, arrangement,
adjustment, wind-up, liquidation, dissolution, composition or other relief with
respect to it or its debts, (ii) seek appointment of a receiver, trustee,
custodian or other similar official for it or any part of its assets, (iii)
make a general assignment for the benefit of creditors, or (iv) take any
action in furtherance of, or consenting or acquiescing in, any of the
foregoing.
Section 5.06 Other Debt. The Owner shall not after the Closing
Date, contract for, create, incur, assume or suffer to exist any indebtedness
other than the Serial Loans, except (i) trade payables and expense accruals
incurred in the ordinary course and which are incidental to the purposes
permitted pursuant to Section 5.04 hereof and (ii) indebtedness contemplated by
this Loan Agreement or any of the other Security Documents.
Section 5.07 Guarantees, Loans, Advances and Other Liabilities.
The Owner shall not make any loan or advance or credit to, or guarantee
(directly or indirectly or by an instrument having the effect of assuring
payment or performance on any obligation of another Person or such Person's
capability of so doing, or otherwise), endorse (except for the endorsement of
checks for collection or deposit) or otherwise become contingently liable,
directly or indirectly, in connection with the obligations, stock or dividends
of, or own, purchase, repurchase or acquire (or agree contingently to do so)
any stock, obligations or securities of, or any other interest in, or make any
capital contribution to, any other Person except the Owner's obligations as
under the Other Loans.
Section 5.08 Consolidation, Merger and Sale of Assets. The Owner
shall not consolidate with, or merge with or into, any other Person or convey
or transfer to any Person all or any part of the Collateral.
Section 5.09 Capital Expenditures. The Owner shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(both realty and personalty) other than for the purchase of its Vessel.
Section 5.10 Books and Records. The Owner shall at all times keep
proper books and records of all of its business and financial affairs in
accordance with generally accepted accounting principles, as in effect on the
date hereof in the jurisdiction in which its chief executive office is
located. The Owner shall keep books of account or records concerning its
accounts, inventory, contract rights, equipment and proceeds at its offices
located at United House, 14-16 Nelson Street, Douglas, Isle of Man.
[Section 5.11 Restricted Payments. Prior to the First Principal
Payment Date, the Owner shall not make any Restricted Payment. On and after
the First Principal Payment Date, the Owner may make a Restricted Payment if
(a) no default under the Mortgage shall have occurred and be continuing, (b)
the Serial Notes shall have been repaid in full and (c) the Vessel shall be on
charter to the Initial Charterer or under an Acceptable Replacement Charter to
a charterer whose unsecured credit ratings from the Rating Agencies are at
least equal to the respective unsecured ratings of Chevron and the terms of
such charters shall be at least sufficient to pay in full all of the remaining
payments of principal and interest outstanding on the Term Loan.] [TO BE
REVISED TO CONFORM TO TERM REGISTRATION STATEMENT.]
Section 5.12 Acceptable Replacement Charter. (a) In the event the
Initial Charterer terminates the Initial Charter, the Owner shall cooperate
with the Manager and the Trustee to locate an Acceptable Replacement Charter.
In the event an Acceptable Replacement Charter is available the Owner shall
enter into such Acceptable Replacement Charter and assign all of its right,
title and interest in, to and under such Acceptable Replacement Charter to the
Lender as collateral for the Owner's obligations hereunder.
(b) In the event an Acceptable Replacement Charter is not
available, the Owner shall instruct the Manager to solicit bids for the sale
of the Vessel. In the event the Manager notifies the Owner that the Manager
has obtained a cash bid that results in the realization of net proceeds in an
amount that is equal to or greater than the outstanding principal balance of
the Term Loan, together with accrued interest thereon, the Owner shall execute
any and all documents, instruments and agreements necessary or advisable to
effectuate the sale that would result in the greatest cash net proceeds.
(c) If no bid meets the requirements set forth in Section
5.12(b) hereof, then the Owner shall consult with the Manager and the Trustee
pursuant to the Management Agreement and consider bids regarding the
disposition of the Vessel. If the Lender, or the Lender's assignee, consents
in writing, the Owner shall accept the highest bid available for the sale of
the Vessel. If the Lender, or the Lender's assignee, does not so consent, the
Owner shall recharter the Vessel pursuant to a charter that the Manager, in
its sole discretion, deems appropriate so long as (i) such charter is an arms'
length agreement, (ii) the charterhire payable thereunder during the term
thereof is an amount sufficient to (A) make the mandatory sinking fund
payments, together with all interest payable thereon, due on the Term Mortgage
Notes, (B) pay Recurring Fees and Taxes for such Vessel, (C) to pay the
Management Fees and Technical Advisor's Fees for such Vessel and (D) to pay
the amount of fees and expenses of the Indenture Trustee and Collateral
Trustee allocable to such Vessel and (iii) such charter terminates no later
than ___________, 2014.
Section 5.13 Provision of Reports and Information. The Owner shall
provide to the Lender any and all information and reports required to be
furnished or provided by it pursuant to the Act.
ARTICLE VI
EVENTS OF DEFAULT; REMEDIES
Section 6.01 Events of Default. Any one or more of the following
events shall constitute an Event of Default:
(a) if the Owner shall default in the making of any payment of
all or any part of the principal of, interest on, or other amount or charge
due under this Loan Agreement, whether at the stated maturity thereof or at
any date fixed for payment by acceleration, by notice of prepayment or
otherwise, and the continuance of such default for a period of two Business
Days after the due date therefor;
(b) if the Owner shall default in the performance or observance
of any covenant contained in Sections 5.02, 5.03, 5.10 and 5.12 of this Loan
Agreement, and the continuance of such default for a period of 30 days after
written notice thereof by the Lender;
(c) if the Owner shall default in the performance or observance
of any covenant contained in Article V hereof (other than Sections 5.01, 5.02,
5.03, 5.10 and 5.12 of this Loan Agreement);
(d) if any representation or warranty made by the Owner herein,
in any Security Document or in any document or certificate furnished by the
Owner in connection herewith or therewith or pursuant hereto or thereto shall
at any time prove to have been false, incorrect or misleading in any material
respect at the time made or deemed to be made;
(e) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings, or for the winding-up or liquidation
of its affairs, shall have been entered against the Owner and such decree or
order shall have remained in force undischarged or unstayed for a period of
sixty (60) days;
(f) The Owner shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings of or relating to such party
or of or relating to all or substantially all of such party's property;
(g) The Owner shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(h) if an Event of Default as defined in the Mortgage shall
occur and be continuing.
Section 6.02 Enforcement of Remedies. After an Event of Default
shall have occurred and be continuing, then and in every such case the Lender
may exercise any or all of the rights and powers and pursue any and all of the
remedies pursuant to this Article and any of the other Security Documents, and
to the extent permitted by applicable law, may, provided the Lender pursuant
to Section 6.03 hereof shall have declared the unpaid principal amount of the
Term Loan immediately due and payable, take possession of all or any part of
the Collateral and may exclude the Owner and all Persons claiming under it
wholly or partly therefrom.
Section 6.03 Acceleration of Term Loan. Upon the occurrence and
during the continuance of an Event of Default hereunder, the Lender may
declare the unpaid principal amount of the Term Loan, together with accrued
interest thereon to be immediately due and payable, upon which declaration
such principal amount and such accrued interest shall immediately become due
and payable without further act or notice of any kind.
Section 6.04 Specific Remedies. Upon the occurrence and during the
continuance of an Event of Default and provided that the Lender pursuant to
Section 6.03 hereof shall have declared the unpaid principal amount of the
Term Loan immediately due and payable:
(a) At the request of the Lender, the Owner shall promptly
execute and deliver to the Lender such instruments and other documents as the
Lender may deem necessary or advisable to enable the Lender or an agent or
representative designated by the Lender, at such time or times and place or
places as the Lender may specify, to obtain possession of all or any part of
the Collateral to which possession the Lender shall at the time be entitled
hereunder. If the Owner shall for any reason fail to execute and deliver such
instruments and documents after such request by the Lender, the Lender may
obtain a judgment conferring on the Lender the right to such possession
immediately and requiring the Owner to deliver such instruments and documents
to the Lender, to the entry of which judgment the Owner hereby specifically
consents.
(b) The Lender may proceed to enforce the rights of the Lender
by directing payment to it of all monies payable under any agreement or
undertaking constituting a part of the Collateral, by proceedings in any court
of competent jurisdiction for the appointment of a receiver or for sale of all
or any part of the Collateral possession to which the Lender shall at the time
be entitled hereunder or for foreclosure of such Collateral, and by any other
action, suit, remedy or proceeding authorized or permitted by this Loan
Agreement or by law or by equity, and may file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the
claims of the Lender asserted or upheld in any bankruptcy, receivership or
other judicial proceedings.
(c) The Lender shall be entitled to set-off against and withdraw
all amounts constituting a part of the Collateral and to apply the same as
follows:
First: To the payment of all reasonable expenses and charges,
including the expenses of any taking, attorney's fees, court costs
and other expenses or advances made or incurred by the Lender in
connection with the ascertainment or protection of its rights and
the pursuance of its remedies hereunder or under any of the
Security Documents (including, without limitation, the reasonable
fees and disbursements of counsel);
Second: To the payment of all amounts due to the Lender in
respect of taxes, indemnities, fees, expenses, premiums, purchase
of liens or otherwise under the provisions hereof or under any of
the Security Documents;
Third: To the payment of interest on the Serial Loans and Term
Loan, pro rata, in accordance with their respective outstanding
balances;
Fourth: To the payment of principal on the Serial Loans and the
Term Loan, pro rata, in accordance with their respective
outstanding balances;
Fifth: To the payment of any amount due and owing under the Other
Loans, pro rata, in the event of an acceleration of the principal
amount of such Other Loans; and
Sixth: To the payment of any surplus thereafter remaining to the
Owner or whomsoever may be lawfully entitled thereto.
(d) Without limiting the foregoing, the Lender, its assigns and
its legal representatives shall have all the remedies of a secured party under
applicable law and such further remedies as from time to time may hereafter be
provided pursuant to such law for a secured party. In exercising its power of
sale, the Lender shall be entitled to add to the Term Loan any and all of the
Lender's expenses. In exercising its power of sale under this Loan Agreement,
the Lender may sell such portion of the Collateral or any part thereof, either
as one unit or in separate units, all as the Lender may in its discretion
elect; and the Lender may so sell the aforesaid properties, rights and
interests or any part thereof either separately from or together with the
whole or any part of other property which may constitute security for any
obligation with respect to the Term Loan, all as the Lender may in its
discretion elect.
Section 6.05 Rights and Remedies Cumulative. Each and every right,
power and remedy herein specifically given to the Lender under this Loan
Agreement shall be cumulative and shall be in addition to every other right,
power and remedy herein specifically given or now or hereafter existing at
law, in equity or by statute, and each and every right, power and remedy
whether specifically herein given or otherwise existing may be exercised from
time to time and as often and in such order as may be deemed expedient by the
Lender, and the exercise or the beginning of the exercise of any power or
remedy shall not be construed to be a waiver of the right to exercise at the
same time or thereafter any other right, power or remedy. No delay or
omission by the Lender in the exercise of any right, remedy or power or in the
pursuance of any remedy shall impair any such right, power or remedy or be
construed to be a waiver of any default on the part of the Owner or to be an
acquiescence therein.
Section 6.06 Restoration of Rights and Remedies. In case the
Lender shall have proceeded to enforce any right, power or remedy under this
Loan Agreement by foreclosure, entry or otherwise, and such proceedings shall
have been discontinued or abandoned for any reason or shall have been
determined adversely to the Lender, then and in every such case the Owner and
the Lender shall be restored to their former positions and rights hereunder
with respect to the Collateral, and all rights, remedies and powers of the
Lender shall continue as if no such proceedings had been taken.
Section 6.07 Waiver of Past Defaults. Any past default hereunder
with respect to the Term Loan or its consequences may be waived by the Lender.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every
purpose of this Loan Agreement; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.01 Amendment. This Loan Agreement may be amended from
time to time by written agreement signed by the parties hereto.
Section 7.02 Severability. If any provision of this Loan Agreement
is held to be in conflict with any applicable statute or rule of law or is
otherwise held to be unenforceable for any reason whatsoever, such
circumstances shall not have the effect of rendering the provision in question
inoperative or unenforceable in any other case or circumstance, or of
rendering any other provision or provisions herein contained invalid,
inoperative, or unenforceable to any extent whatsoever. The invalidity of any
one or more phrases, sentences, clauses or Sections of this Loan Agreement
contained, shall not affect the remaining portions of this Loan Agreement, or
any part thereof.
Section 7.03 Notices. All demands, notices and communications
hereunder shall be in writing, personally delivered or mailed by certified
mail-return receipt requested, and shall be deemed to have been duly given
upon receipt (a) in the case of the Lender, at the following address: c/o JH
Management Corporation, Room 6/9, One International Place, Boston,
Massachusetts 02110-2624, (b) in the case of the Owner, at the following
address: United House, 14-16 Nelson Street, Douglas, Isle of Man, or at other
such address as shall be designated by such party in a written notice to the
other parties.
Section 7.04 Consent to Jurisdiction. Any legal suit, action or
proceeding against the Owner arising out of or relating to this Loan
Agreement, or any transaction contemplated hereby, may be instituted in any
federal or state court in The City of New York, State of New York and the
Owner hereby waives any objection which it may now or hereafter have to the
laying of venue of any such suit, action or proceeding, and the Owner hereby
irrevocably submits to the jurisdiction of any such court in any such suit,
action or proceeding. The Owner hereby irrevocably appoints and designates CT
Corporation System, having an address at 1633 Broadway, New York, New York,
its true and lawful attorney-in-fact and duly authorized agent for the limited
purpose of accepting servicing of legal process and the Owner agrees that
service of process upon such party shall constitute personal service of
process on the Owner. The Owner shall maintain the designation and
appointment of such authorized agent until all amounts payable under this Loan
Agreement shall have been paid in full. If such agent shall cease to so act,
the Owner shall immediately designate and appoint another such agent
satisfactory to the Lender and shall promptly deliver to the Lender evidence
in writing of such other agent's acceptance of such appointment.
Section 7.05 Captions. The captions or headings in this Loan
Agreement are for convenience only and in no way define, limit or describe the
scope or intent of any provisions or sections of this Loan Agreement.
Section 7.06 Governing Law. This Loan Agreement shall be governed
by and interpreted in accordance with the laws of the State of New York,
without giving effect to the principles of conflicts of law.
Section 7.07 No Partnership. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture among the parties
hereto and the services of each party shall be rendered as an independent
contractor and not as agent for any other party.
Section 7.08 Counterparts. This Loan Agreement may be executed in
any number of counterparts and by different parties hereto on separate
counterpart, each of which shall be deemed to be an original. Such
counterparts shall constitute one and the same agreement.
Section 7.09 Survival. The representations, covenants and
agreements contained in or made pursuant to this Loan Agreement in respect of
either party hereto shall survive the execution and delivery of this Loan
Agreement and shall continue in effect so long as such party's obligations
hereunder remain outstanding.
Section 7.10 Integration. This Loan Agreement and the Schedule and
Exhibits hereto constitute the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements, understandings or representations pertaining to the subject
matter hereof, whether oral or written. There are no warranties,
representations or other agreements between the parties in connection with the
subject matter hereof except as specifically set forth or incorporated herein.
Section 7.11 Reproduction of Documents. This Loan Agreement and all
documents relating thereto, including, without limitation, (a) consents,
waivers and modifications which may hereafter be executed, (b) documents
received by any party at the closing, and (c) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made in the regular course
of business) and that any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence.
Section 7.12 Successors and Assigns; Assignment. This Loan
Agreement shall be binding upon and inure to the benefit of the Owner and the
Lender and their respective successors and assigns. The Owner shall not have
the right to assign its rights hereunder or any interest herein without the
prior written consent of the Lender. Subject to Section 2.09 hereof, the
Lender, at its sole option, shall have the right to assign this Loan
Agreement, the Serial Notes, the Security Documents and any of its rights and
interest hereunder and thereunder.
Section 7.13 General Interpretive Principles. For purposes of
this Loan Agreement except as otherwise expressly provided or unless the
context otherwise requires:
(a) the defined terms in this Loan Agreement shall include the
plural as well as the singular, and the use of any gender herein shall be
deemed to include any other gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles as in effect on the date hereof;
(c) references herein to "Articles", "Sections", "Subsections",
"paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, paragraphs and other subdivisions
of this Loan Agreement;
(d) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to paragraphs and
other subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Loan Agreement as a whole and not to any
particular provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
Section 7.14 Effective Date of Transaction. Notwithstanding the
fact that this Loan Agreement is dated as of __________ 1, 1994, the
transactions set forth herein shall not be effective until the Closing Date.
IN WITNESS WHEREOF, the Owner and the Lender have caused this Loan
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized all as of the day and year first above written.
CALIFORNIA PETROLEUM TRANSPORT
CORPORATION, as Lender
By:
Name:
Title:
CALPETRO TANKERS (BAHAMAS I) LIMITED, as Owner
By:
Name:
Title:
SCHEDULE 1
Defined Terms Used in the Loan Agreement
"Act" means the United States Securities Act of 1933, as amended.
"Acceptable Replacement Charter" means any replacement charter which
satisfies each of the following requirements: (i) the charter is a bareboat
charter and requires that the charterer thereunder "gross up" charterhire
payments to indemnify and hold the Holders of the Securities harmless from any
withholding tax imposed on the charterhire payments or on the payments on the
Securities; (ii) the charterhire payments payable during the non-cancelable
term of such replacement charter, after giving effect to (1) any "gross up" of
such amounts as a result of any withholding tax on such charterhire payments,
(2) the receipt of the Termination Payment and (3) all fees and expenses
incurred in connection with the rechartering of the Vessel, provide sufficient
funds for the payment in full when due of (A) the Allocated Principal Amount
of the Term Mortgage Notes for the related Vessel and interest thereon in
accordance with the revised schedule of sinking fund and principal payments,
that is applicable upon termination of the related Initial Charter, (B) the
amount of Recurring Fees and Taxes for such Vessel, (C) the amount of
Management Fees and Technical Advisor's Fees for such Vessel, (D) the amount of
fees and expenses of the Indenture Trustee and Collateral Trustee allocable to
such Vessel and (E) an amount at least equal to 30% of the estimated amounts,
on a per annum basis, referred to in clauses (B), (C) and (D) above for
miscellaneous or unexpected expenses; and (iii) the Rating Agencies shall have
confirmed in writing to the Trustee that the terms and conditions of such
proposed charter will not result in the withdrawal or reduction of the then
current ratings of the Term Mortgage Notes.
"Affiliate" means with respect to any Person, any other Person directly
or indirectly controlling, controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Assignment of Charter" means the assignment between the Owner and the
Lender, as amended from time to time in accordance with the terms thereof,
together with the documents contemplated thereby, pursuant to which the Owner
assigns to the Lender all of its right, title and interest in, to and under
the Initial Charter.
"Assignment of Earnings and Insurances" means the assignment between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner assigns to the Lender all of its
right, title and interest in, to and under the freights and hires (as well as
any charters entered into after the Closing Date) with respect to the Vessel.
"Assignment of Guarantee" means the assignment between the Owner and the
Lender, as amended from time to time in accordance with the terms thereof,
pursuant to which the Owner assigns to the Lender all of its right, title and
interest in, to and under the Chevron Guarantee.
"Assignment of Management Agreement" means the assignment between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner assigns to the Lender all of its
right, title and interest in, to and under the Management Agreement to secure
its obligations under the Loan Agreements.
"Assignment of Purchase Agreement" means the assignment between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner assigns to the Lender all of its
right, title and interest in, to and under the Purchase Agreement to secure
its obligations under the Loan Agreements.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in New York, New York, or in the city and state
where the Trustee's principal offices are located, are authorized or are
obligated by law, executive order or governmental decree to be closed.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in, or other equivalents (however designated
and whether voting or non-voting) of, such Person's capital stock, whether
outstanding on the Closing Date or issued after the Closing Date, and any and
all rights, warrants or options exchangeable for or convertible into such
capital stock.
"Chevron" means Chevron Corporation, a Delaware corporation.
"Chevron Guarantee" means the guarantee of the obligations of the
Initial Charterer under the Initial Charter given by Chevron dated
____________ 1, 1994.
"Closing Date" means __________ 1, 1994.
"Code" means the United States Internal Revenue Code of 1986 and the
corresponding provisions of any successor statute.
"Collateral" means (i) an assignment of the Initial Charter, (ii) a
mortgage on the Vessel, (iii) an assignment of the earnings and insurances on
the Vessel, (iv) an assignment of the Chevron Guarantee, (v) an assignment of
the Management Agreement relating to the Vessel, (vi) an assignment of the
Purchase Agreement, (vii) the pledge of the shares of the Owner by Owner's
shareholder and (viii) a blanket security interest on all of the assets of the
Owner now existing or hereafter created, together with all income and proceeds
thereof.
"Collateral Trust Agreement" means the collateral trust agreement, dated
as of the date hereof, among the Lender, the Collateral Trustee and the
Trustee.
"Collateral Trustee" means Chemical Trust Company of California, not in
its individual capacity but solely as indenture trustee under the Collateral
Trust Agreement.
"Commencement Date" means the date on which the Vessel is accepted by
the Initial Charterer under the Initial Charter.
"Compulsory Acquisition" means requisition for title or other compulsory
acquisition of the Vessel (otherwise than by requisition for hire), capture,
seizure, detention or confiscation of the Vessel by any other government or by
Persons acting or purporting to act on behalf of any government or
governmental authority.
"Default Period" means the period commencing the date any payment
hereunder was due to but not including the date such payment is paid in full.
"Default Rate" means a rate per annum for each day during the Default
Period until such payment shall be paid in full equal to 1.50% above LIBOR at
the commencement of such period.
"Event of Default" means an Event of Default under Section 6.01 of the
Loan Agreement.
"First Principal Payment Date" means ______________________, the Payment
Date immediately succeeding the Payment Date on which the Serial Loans are
paid in full.
"Governmental Approval" means any authorization, consent, approval,
license, franchise, lease, ruling, permit, tariff, rate, certification,
exemption, filing or registration by or with any Governmental Authority
relating to the ownership of the Collateral or to the execution, delivery or
performance of the Loan Agreement or any Security Document.
"Governmental Authority" means the federal government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any other governmental entity with authority over the Owner
or operation of the Vessels.
"Holder" means the Person in whose name a Security is registered in the
related securities register.
"Indentures" means the Indenture, dated as of _______ 1, 1994 between
the Owner and the Trustee pursuant to which the Term Mortgage Notes will be
issued and the Indenture, dated as of _______ 1, 1994 between the Lender and
the Trustee pursuant to which the Serial Mortgage Notes will be issued.
"Initial Charter" means with respect to each Vessel, the Bareboat
Charter, dated
_________, between the Initial Charterer and the Owner.
"Initial Charterer" means Chevron Transport Corporation, a Liberian
corporation.
"Interest Rate" shall have the meaning assigned to such term in Section
2.02 of the Loan Agreement.
"Issue of One Debenture" means each Issue of One Debenture between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner grants to the Lender a security
interest in all of its assets.
"Law" means any statute, law, rule, regulation, ordinance, order, code,
policy or rule of common law, now or hereafter in effect, and any judicial or
administrative interpretation thereof by a Governmental Authority or
otherwise, including any judicial or administrative order, consent decree or
judgment.
"Lender" means California Petroleum Transport Corporation, a corporation
organized under the laws of the State of Delaware, together with its
successors and assigns.
"LIBOR" means the rate calculated on the basis of the offered rates for
deposits in dollars for a one-month period which appear on the Reuters Screen
LIBO Page as of 11:00 A.M., London time, on the date that is two London
Banking Days preceding the date of calculation. If at least two such offered
rates appear on the Reuters Screen LIBO Page, LIBOR will be the arithmetic
mean of such offered rates (rounded to the nearest .0001 percentage point).
If, at any time of determination, the Reuters Screen LIBO Page is not
available, LIBOR will be calculated as the average (rounded upward, if
necessary, to the next higher 1/16 of 1%) of the respective ratio per annum at
which deposits in dollars for a one month period are offered to each of three
reference banks in the London interbank market at approximately 11:00 A.M.,
London time, on the date that is two London Banking Days preceding the date of
calculation. Each of the Initial Charterer and the Collateral Trustee (as
assignee of the Owner) will select a reference bank and the third reference
bank will be selected by the Initial Charterer and the Collateral Trustee
together or, failing agreement, by the previously selected reference banks
together.
"Lien" means any mortgage, lien (statutory or other), charge, pledge,
security interest, encumbrance, claim, hypothecation, assignment for security,
deposit arrangement or preference or other security agreement of any kind or
nature whatsoever. For purposes of the Loan Agreement, a Person shall be
deemed to own subject to a Lien any property which it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement.
"Loan Agreement" means this Term Loan Agreement, dated as of ________
__, 1994, between the Owner and the Lender.
"Loan Agreements" means, collectively, this Loan Agreement and the
Serial Loan Agreement, dated the date hereof, between the Owner and the Lender
wherein the Lender makes the Serial Loans to the Owners.
"London Banking Day" means any day on which dealings in deposits in
United States dollars are carried on in the London interbank market and on
which commercial banks are open for domestic and international business
(including dealings in United States dollar deposits) in London and New York.
"Loss Date" means the date which is 90 days after the occurrence of a
Total Loss of the Vessel.
"Management Agreement" means the agreement, dated the Closing Date,
among the Owner, the Manager and the Technical Adviser.
"Manager" means the Person performing the duties of the Manager under the
Management Agreement, initially P.D. Gram & Co. ans.
"Mortgage" means, with respect to the Vessel, the first preferred ship
mortgages on the Vessel granted by the Owner to the Lender, as amended from
time to time in accordance with the terms of such Mortgage.
"Optional Termination Date" means the [8th, 10th, 12th or 14th] [9th,
11th, 13th or 15th] [10th, 12th, 14th or 16th] [11th, 13th or 15th]
anniversary of the Commencement Date.
"Other Owners" means Calpetro Tankers (Bahamas II) Limited, Calpetro
Tankers (Bahamas III) Limited and Calpetro Tankers (IOM) Limited.
"Other Loans" means each of the loans from California Petroleum
Transport Corporation to each of the Other Owners made on the Closing Date,
having an aggregate initial principal amount of $__________.
"Owner" means CalPetro Tankers (Bahamas I) Limited, a company organized
under the laws of The Commonwealth of the Bahamas.
"Payment Date" means each ________ and ______________ commencing
___________ 1995.
"Person" means an individual, a partnership, a corporation, a joint
venture, an unincorporated association, a joint-stock company, a trust, or
other entity or a government or any agency or political subdivision thereof.
"Purchase Agreement" means the Vessel Purchase Agreement, dated as of
_________________, between the Owner and the Initial Charterer wherein the
Owner purchases the Vessel from the Initial Charterer.
"Rating Agencies" means Moody's Investors Service, Inc., Standard &
Poor's Rating Group and Duff & Phelps Credit Rating Co.
"Registration Jurisdiction" means the jurisdiction in which the Vessel
is or will be registered.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or partnership agreement or other organizational or
governing documents of such Person, and, any Law applicable to or binding upon
such Person or any of its properties or to which such Person or any of its
properties is subject.
"Restricted Payment" means any of the following: (i) the declaration or
payment of any dividend or any other distribution on Capital Stock of the
Owner or any payment made to the direct or indirect holders (in their
capacities as such) of Capital Stock of the Owner (other than dividends or
distributions payable solely in Capital Stock or in options, warrants or other
rights to purchase Capital Stock, (ii) the purchase, redemption or other
acquisition or retirement for value of any Capital Stock of the Owner and
(iii) the making of any loans or advances to any Affiliate of the Owner.
"Securities" means, collectively, the Term Mortgage Notes and the Serial
Mortgage Notes.
"Security Documents" means the Loan Agreement, the Mortgage, the
Assignment of Charter, the Assignment of Earnings and Insurances, the
Assignment of Guarantee, the Assignment of Management Agreement and the Issue
of One Debenture, collectively.
"Serial Loans" shall have the meaning assigned to such term in the
Preliminary Statement of this Loan Agreement.
"Serial Mortgage Notes" means the Serial First Preferred Term Mortgage
Notes which will mature serially from _____________, 1995 to _____________,
2005 in the initial aggregate amount of $168,500,000 issued by the Lender
concurrently with the issuance of the Term Mortgage Notes.
"Technical Adviser" means the person performing the duties of the
Technical Adviser under the Management Agreement, initially Barber Ship
Management Group.
"Term Loan" shall have the meaning assigned to such term in the
Preliminary Statement of this Loan Agreement.
"Term Mortgage Notes" means __% First Preferred Mortgage Notes Due 2014
in the initial aggregate amount of $117,900,000 issued by the Lender
concurrently with the issuance of the Serial Mortgage Notes.
"Total Loss" means either (a) an actual or constructive or compromised
or arranged total loss of the Vessel, (b) a Compulsory Acquisition of the
Vessel or (c) if so declared by the Initial Charterer at any time and in its
sole discretion a requisition for hire of the Vessel for a period in excess of
180 days.
"Total Loss Proceeds" means all compensation, damages and other payments
(including insurance proceeds other than certain liability insurance proceeds)
received by the Trustee from any Person, including any governmental authority,
with respect to or in connection with a Total Loss.
"Trustee" means Chemical Trust Company of California, not in its
individual capacity but solely as indenture trustee under the Indentures.
"Vessel" shall have the meaning assigned to such term in the Preliminary
Statement of this Loan Agreement.
============================================================
COLLATERAL TRUST AGREEMENT
Among
CALIFORNIA PETROLEUM TRANSPORT CORPORATION
CHEMICAL TRUST COMPANY OF CALIFORNIA,
as Collateral Trustee
CHEMICAL TRUST COMPANY OF CALIFORNIA
as Serial Indenture Trustee
and
CHEMICAL TRUST COMPANY OF CALIFORNIA
as Term Indenture Trustee
Dated as of __________ __, 1994
===========================================================
TABLE OF CONTENTS
Page
PREAMBLE............................................................... 1
ARTICLE ONE
DEFINITIONS AND CERTAIN OTHER GENERAL PROVISIONS
1.01 Definitions................................................ 5
1.02 Limitation of Rights....................................... 20
1.03 Effectiveness of Collateral Agreement...................... 20
ARTICLE TWO
ENFORCEMENT NOTICE; EXERCISE
OF REMEDIES; DETERMINATIONS
PRIOR TO ENFORCEMENT
2.01 Enforcement Notice......................................... 20
2.02 General Authority of the Collateral Trustee Over the
Collateral................................................. 21
2.03 Right To Initiate Judicial Proceedings..................... 22
2.04 Exercise of Powers; Instructions........................... 22
2.05 Remedies Not Exclusive..................................... 23
2.06 Waiver and Estoppel........................................ 24
2.07 Determinations Prior to Enforcement........................ 25
2.08 Limitation on Collateral Trustee's Duty in Respect of
Collateral................................................. 25
2.09 Limitation by Law.......................................... 25
ARTICLE THREE
THE TRUST ACCOUNTS; DISTRIBUTIONS
3.01 The Trust Accounts......................................... 26
3.02 Investment of Funds Deposited in Trust
Accounts................................................... 30
3.03 Payment Dates.............................................. 30
3.04 Application of Moneys in the Collateral
Account.................................................... 37
3.05 Collateral Trustee's Calculations.......................... 38
ARTICLE FOUR
AGREEMENTS WITH COLLATERAL TRUSTEE
4.01 Delivery of Secured Instruments and Security
Documents.................................................. 39
4.02 Information as to Loan Agreements and Indenture
Trustees................................................... 39
4.03 Representations and Warranties; Further
Assurances................................................. 39
4.04 Other Agreements of California Petroleum................... 40
ARTICLE FIVE
RELEASES; NON-DISTURBANCE
5.01 Releases................................................... 41
5.02 Non-Disturbance............................................ 42
ARTICLE SIX
THE COLLATERAL TRUSTEE
6.01 Acceptance of Trust........................................ 42
6.02 Exculpatory Provisions..................................... 42
6.03 Delegation of Duties....................................... 44
6.04 Reliance by Collateral Trustee............................. 44
6.05 Limitations on Duties of Collateral Trustee................ 45
6.06 Moneys To Be Held in Trust................................. 46
6.07 Resignation and Removal of the Collateral
Trustee.................................................... 46
6.08 Status of Successor Collateral Trustee..................... 48
6.09 Merger of the Collateral Trustee........................... 48
6.10 Co-Trustee; Separate Trustee............................... 48
6.11 Treatment of Payee or Indorsee by Collateral Trustee;
Representatives of Secured Parties......................... 51
ARTICLE SEVEN
MISCELLANEOUS
7.01 Notices.................................................... 51
7.02 No Waivers................................................. 52
7.03 Amendments, Supplements and Waivers........................ 52
7.04 Headings................................................... 53
7.05 Severability............................................... 54
7.06 Successors and Assigns..................................... 54
7.07 Governing Law.............................................. 54
7.08 Counterparts............................................... 54
7.09 Termination................................................ 54
7.10 No Liability to Other Secured Parties...................... 55
7.11 Immunities of Incorporators, Officers,
Directors and Stockholders of California Petroleum......... 55
7.12 Designated Representative................................... 56
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
COLLATERAL TRUST AGREEMENT ("Collateral Agreement"), dated as
of __________ __, 1994 among CALIFORNIA PETROLEUM TRANSPORT CORPORATION, a
Delaware corporation ("California Petroleum"), CHEMICAL TRUST COMPANY OF
CALIFORNIA, as Collateral Trustee, CHEMICAL TRUST COMPANY OF CALIFORNIA, as
Serial Indenture Trustee, and CHEMICAL TRUST COMPANY OF CALIFORNIA, as Term
Indenture Trustee.
W I T N E S S E T H:
WHEREAS, capitalized terms used herein shall have the respective
meanings set forth or referred to in Article One hereof;
WHEREAS, California Petroleum, the Serial Indenture Trustee and
solely for purposes of the Trust Indenture Act, Chevron, are entering into the
Serial Indenture pursuant to which California Petroleum, as agent for, and on
behalf of, the Owners, will issue Serial Mortgage Notes in the aggregate
principal amount of $168,500,000, and California Petroleum and the Term
Indenture Trustee are entering into the Term Indenture pursuant to which
California Petroleum, as agent for, and on behalf of, the Owners, will issue
Term Mortgage Notes in the aggregate principal amount of $117,900,000;
WHEREAS, California Petroleum is entering into a Serial Loan
Agreement and a Term Loan Agreement with each Owner pursuant to which
California Petroleum will loan to such Owner an allocable amount of the
proceeds of the sale of the Serial Mortgage Notes and the Term Mortgage Notes,
respectively, in order to facilitate the acquisition of the Vessels by the
Owners and the charter of the Vessels to Chevron Transport;
WHEREAS, each Owner, in order to secure its obligations to
California Petroleum under its Serial Loan Agreement and Term Loan Agreement,
is entering into a Mortgage, an Assignment of Charter, an Assignment of
Earnings and Insurances, an Assignment of Initial Charter Guarantee, an
Assignment of Management Agreement and an Issue of One Debenture, and Chevron
is entering into an Initial Charter Guarantee;
WHEREAS, in order to further secure the obligations of each
Owner to California Petroleum under its respective Serial Loan Agreement and
Term Loan Agreement, all of the issued and outstanding shares of each owner
have been pledged to California Petroleum pursuant to the Stock Pledges;
WHEREAS, in order to secure its obligations under the Serial
Indenture and the Term Indenture, California Petroleum is entering into this
Collateral Agreement pursuant to which California Petroleum is assigning and
pledging to the Collateral Trustee all of its right title and interest in, to
and under all of the Security Documents, whether now existing or arising
hereafter, as described herein; and
WHEREAS, the Serial Indenture and the Term Indenture each provides
that a condition to its effectiveness is the execution and delivery of a
collateral trust agreement substantially in the form of this Collateral
Agreement;
GRANTING CLAUSE
NOW, THEREFORE, in consideration of the mutual promises
contained herein and to provide for the equal and ratable security of each
Secured Party with respect to the Secured Obligations owed to it and in
consideration of the premises and of the covenants in the Indentures and in the
Notes and of the purchase of the Notes by their holders, and of the sum of $1
paid to California Petroleum by the Collateral Trustee at or before the
delivery of this Collateral Agreement, the receipt and sufficiency of which
is hereby acknowledged, California Petroleum has granted, bargained, sold,
assigned, transferred, conveyed, mortgaged, pledged, granted a security
interest in and confirmed, and California Petroleum does hereby grant,
bargain, sell, assign, transfer, convey, mortgage, pledge and grant a security
interest in and confirm to the Collateral Trustee, its successors and assigns,
in trust for the equal and ratable security and benefit of the Indenture
Trustees for the benefit of holders from time to time of Secured Obligations,
a first priority security interest in and first Lien on all estate, right,
title and interest of California Petroleum in, to and under the following
described property, rights and privileges, whether now owned or existing or
hereafter acquired or arising and regardless of where located, which
collectively, including all property specifically subjected to the Lien of
this Collateral Agreement by the terms hereof, by any supplement or amendment
hereto, are included within the Trust Estate, subject to the other terms and
conditions of this Collateral Agreement:
(1) Each Vessel, in accordance with the terms and conditions of
the related Mortgage and Assignment of Mortgage;
(2) Each Initial Charter, in accordance with the terms and
conditions of the related Assignment of Initial Charter and Collateral
Assignment of Initial Charter;
(3) Each Initial Charter Guarantee, in accordance with the terms
and conditions of the related Assignment of Initial Charter Guarantee and
Collateral Assignment of Initial Charter Guarantee;
(4) Each Management Agreement, in accordance with the terms of
the related Assignment of Management Agreement;
(5) Each Vessel Purchase Agreement, in accordance with the terms
of the related Assignment of Vessel Purchase Agreement;
(6) Each Assignment of Earnings and Insurances;
(7) Each Issue of One Debenture;
(8) The Pledged Stock, in accordance with the Stock Pledge;
(9) Each Loan Agreement;
(10) Any additional security agreement, assignment or mortgage
document entered into by any Owner from time to time in connection with such
Owner's Loan Agreements;
(11) All rights of California Petroleum to receive payments of
any kind, to execute any election or option or to give or receive any notice,
consent, waiver or approval under or in respect of any of the foregoing
documents and instruments;
(12) All the charterhire, tolls, rents, issues, profits,
products, revenues and other income (including sales proceeds) of the property
subjected or required to be subjected to the Lien of this Collateral
Agreement, and all of the estate, right, title and interest of California
Petroleum in and to the same and every part of said property;
(13) All moneys and securities, including the Trust Accounts and
any Permitted Investments, now or hereafter paid or deposited or required to
be paid or deposited to or with the Collateral Trustee by or for the account of
California Petroleum or otherwise pursuant to any term of any Security
Document, and held or required to be held by the Collateral Trustee hereunder;
(14) All requisition proceeds with respect to any Vessel or any
part thereof (to the extent of California Petroleum's interest therein
pursuant to the terms of the Mortgage) and all insurance proceeds with respect
to any Vessel or any part thereof (to the extent of California Petroleum's
interest therein pursuant to the terms of the Mortgage);
(15) Any Acceptable Replacement Charter or other charter assigned
to California Petroleum pursuant to the Assignment of Earnings and Insurances;
and
(16) All income, payments and proceeds of the foregoing.
HABENDUM CLAUSE
TO HAVE AND TO HOLD the aforesaid property unto the Collateral
Trustee, its successors and assigns, in trust for the equal and ratable
benefit and security of each Secured Party with respect to the Secured
Obligations owed to it and for the uses and purposes and subject to the terms
and conditions set forth in this Collateral Agreement.
It is expressly agreed that anything contained in this
Collateral Agreement to the contrary notwithstanding, California Petroleum
shall remain liable under the Security Documents to perform all of the
obligations assumed by it under any of those documents, all in accordance with
and pursuant to the terms and provisions of those documents, and the
Collateral Trustee and the Secured Parties shall have no obligation or
liability under the Security Documents by reason of or arising out of the
assignment under this Collateral Agreement, nor shall the Collateral Trustee or
the Secured Parties be required or obligated in any manner to perform or
fulfill any obligations of California Petroleum under or pursuant to the
Security Documents or, except as expressly provided in this Collateral
Agreement, to make any payment, or to make any inquiry as to the nature or
sufficiency of any payment received by it, or present or file any claim, or
take any action to collect or enforce the payment of any amounts which may
have been assigned to it or to which it may be entitled at any time or times.
As between the holders of the Serial Mortgage Notes, on the one
hand, and the holders of the Term Mortgage Notes, on the other hand, it is
hereby agreed that the following property included in the Trust Estate shall be
held by the Collateral Trustee hereunder for the equal and ratable benefit of
the holders of the Secured Obligations other than the holders of the Serial
Mortgage Notes at the times and under the circumstances set forth below:
From and after the satisfaction and payment in full of
all of an Owner's obligations under and pursuant to a Serial Loan
Agreement, all Collateral securing such obligations including, without
limitation, (i) the related Initial Charter (including any
Termination Payment made thereunder), (ii) any amounts received under
the related Security Documents in connection with the occurrence of a
Total Loss with respect to such Vessel, (iii) any amounts received
under the related Security Documents in connection with the exercise
of any remedies thereunder and (iv) all payments under the related
Term Loan Agreement by the related Owner.
AND IT IS HEREBY COVENANTED, DECLARED AND AGREED by California
Petroleum that all the Secured Obligations are to be secured and that all the
Trust Estate is to be held, subject to the further covenants, conditions, uses
and trusts herein set forth, and California Petroleum, for itself and its
successors and assigns, does hereby covenant and agree to and with the
Collateral Trustee and its successors in said trust for the benefit of those
who shall hold the Secured Obligations or any of them, as set forth herein.
ARTICLE ONE
DEFINITIONS AND CERTAIN OTHER GENERAL PROVISIONS
Section 1.01 Definitions. (a) The following terms, as
used herein, have the following respective meanings:
"Acceptable Replacement Charter" means any replacement charter
which satisfies each of the following requirements: (i) the charter is a
bareboat charter and requires that the charterer thereunder "gross up"
charterhire payments to indemnify and hold the holders of the Term Mortgage
Notes harmless from any withholding tax imposed on the charterhire payments or
on the payments of the Term Mortgage Notes, (ii) the charterhire payments
payable during the non-cancellable term of such replacement charter, after
giving effect to (1) any "gross up" of such amounts as a result of any
withholding tax on such charterhire payments, (2) the receipt of the
Termination Payment and (3) all fees and expenses incurred in connection with
the recharter of the Vessel, provide sufficient funds for the payment in full
when due of (A) the Allocated Principal Amount of the Term Mortgage Notes for
the related Vessel and interest thereon in accordance with the revised
schedule of sinking fund and principal payments, that is applicable upon
termination of the related Initial Charter, (B) the amount of Recurring Fees
and Taxes for such Vessel, (C) the amount of Management Fees and Technical
Advisor's Fees for such Vessel, (D) the amount of fees and expenses of the
Indenture Trustee and Collateral Trustee allocable to such Vessel and (E) an
amount at least equal to 30% of the estimated amounts, on a per annum basis,
referred to in clauses (B), (C) and (D) above for miscellaneous or unexpected
expenses and (iii) the Rating Agencies shall have confirmed in writing to the
Indenture Trustee that the terms and conditions of such proposed charter will
not result in the withdrawal or reduction of the then current ratings of the
Term Mortgage Notes.
"Affiliate" means with respect to any Person (the "relevant
Person") (i) any other Person that directly, or indirectly through one or more
intermediaries, controls the relevant Person (a "Controlling Person") or (ii)
any Person (other than the relevant Person) which is controlled by or is under
common control with a Controlling Person. As used herein, the term "control"
means possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"Allocated Principal Amount" means (i) when used with reference
to the Serial Mortgage Notes relating to any Vessel at any time, an aggregate
principal amount of outstanding Serial Mortgage Notes equal to the aggregate
principal amount of Serial Loans of the related Owner then outstanding and
(ii) when used with reference to the Term Mortgage Notes relating to any
Vessel at any time, an aggregate principal amount of outstanding Term Mortgage
Notes equal to the outstanding principal amount of the Term Loan of the
related Owner.
"Applicable Secured Parties" means (i) at any time when an
Enforcement Notice delivered by the Serial Indenture Trustee is in effect and
no Enforcement Notice delivered by the Term Indenture Trustee is in effect,
the Majority Serial Noteholders, (ii) at any time when an Enforcement Notice
delivered by the Term Indenture Trustee is in effect and no Enforcement Notice
delivered by the Serial Indenture Trustee is in effect, the Majority Term
Noteholders and (iii) at any time when an Enforcement Notice delivered by both
the Serial Indenture Trustee and the Term Indenture Trustee are in effect, the
Majority Noteholders.
"Assignment of Earnings and Insurances" means, for any Vessel,
the Assignment of Earnings and Insurances, dated the date hereof, between the
related Owner and California Petroleum, as the same may be amended from time
to time.
"Assignment of Guarantee" means, for each Initial Charter
Guarantee, the Assignment of Guarantee, dated the date hereof, between the
Owner of the related Vessel and California Petroleum, as the same may be
amended from time to time.
"Assignment of Initial Charter" means, for each Initial
Charter, the Assignment of Initial Charter, dated the date hereof, between the
Owner of the related Vessel and California Petroleum, as the same may be
amended from time to time.
"Assignment of Management Agreement" means, for any Management
Agreement, the Assignment of Management Agreement, dated the date hereof,
between the Owner of the related Vessel and California Petroleum, as the same
may be amended from time to time.
"Assignment of Mortgage" means, for each Mortgage, the
Assignment of Mortgage between California Petroleum and the Collateral
Trustee, as the same may be amended from time to time.
"Assignment of Vessel Purchase Agreement" means, for each
Vessel, the Vessel Purchase Agreement Assignment, dated the date of the Vessel
Purchase Agreement for such Vessel, between the related Owner and California
Petroleum.
"Authorized Financial Officer" of any Person means the Chief
Financial Officer, Treasurer or Controller of such Person.
"Bankruptcy Code" means the United States Bankruptcy Code of
1978, as amended.
"Business Day" means any day except a Saturday or a Sunday or
other day on which commercial banks are authorized by law to close in New York
City or in the city and state where the Collateral Trustee's principal offices
are located.
"Casualty Account" means the account established and maintained
by the Collateral Trustee pursuant to Section 3.01(f).
"Charter Event of Default" means, for each Initial Charter,
each of the events designated as a default in Clause 17 of such Initial
Charter.
"Charterhire" means, for each Initial Charter, the scheduled
payments of charterhire thereunder.
"Chevron" means Chevron Corporation, a Delaware corporation.
"Chevron Transport" means Chevron Transport Corporation, a
Liberian corporation.
"Closing Date" means ____________, 1994.
"Collateral" means the property in which the Collateral
Trustee, in its own right or as assignee of California Petroleum, is granted a
Lien from time to time under any Security Document, which lien or security
interest has not been released in accordance with the terms hereof or thereof.
"Collateral Account" means the account established and
maintained by the Collateral Trustee pursuant to Section 3.01(g).
"Collateral Assignment of Initial Charter" means for any
Initial Charter, the Collateral Assignment of Initial Charter, dated the date
of the related Initial Charter, between California Petroleum and the Collateral
Trustee, as amended from time to time.
"Collateral Assignment of Initial Charter Guarantee" means, for
any Initial Charter Guarantee, the Collateral Assignment of Initial Charter
Guarantee, dated the date of the related Initial Charter, between California
Petroleum and the Collateral Trustee, as the same may be amended from time to
time.
"Collateral Assignment of Promissory Note Guarantee" means the
Collateral Assignment of Promissory Note Guarantee, dated the Closing Date,
between California Petroleum and the Collateral Trustee, as the same may be
amended from time to time.
"Collateral Trustee" means Chemical Trust Company of California, in
its capacity as trustee under this Collateral Agreement, or any other Person
acting from time to time as trustee hereunder.
"Compulsory Acquisition" means requisition of title or other
compulsory acquisition of any Vessel (otherwise than by requisition for hire),
capture, seizure, condemnation, destruction, detention or confiscation of such
Vessel by any government or by persons acting or purporting to act on behalf
of any governmental authority.
"Default" means any Event of Default or any event or condition
which, with the giving of notice or lapse of time, or both would constitute an
Event of Default.
"Distribution Date" means each date fixed by the Collateral Trustee
for a distribution to the Secured Parties of funds, if any, held in the
Collateral Account pursuant to clause (i) of the first paragraph of Section
3.01(g) or the second paragraph of Section 3.01(g), which shall be the date
from time to time determined by the Collateral Trustee or requested by the
Applicable Secured Parties.
"Enforcement Notice" means a notice delivered or deemed delivered to
the Collateral Trustee pursuant to Section 4.10 of the Term Indenture or the
Serial Indenture stating that an Indenture Event of Default under such
Indenture has occurred and is continuing.
"Equity Account" means the account established and maintained
by the Collateral Trustee pursuant to Section 3.01(e).
"Equity Remainder" means, for any Vessel on the applicable
Payment Date for so long as the Initial Charter with respect to such Vessel
remains in effect, the positive difference, if any, between (a) $100,000 and
(b) the sum of (i) the Management Fee and the Technical Advisor's Fee for such
Vessel deposited into the Operating Account on such Payment Date and the
immediately preceding Payment Date plus (ii) the aggregate amount of Recurring
Fees and Taxes for such Vessel deposited into the Operating Account on such
Payment Date and the immediately preceding Payment Date. On and after the
termination of such Initial Charter, the "Equity Remainder" for such Vessel on
the applicable Payment Date shall be zero.
"Equity Transfer Date" means the Payment Date scheduled to
occur on __________ of each year, commencing _________ __, 1995.
"Exchange Act" means the United States Securities Exchange Act
of 1934, as amended.
"Indenture Event of Default" has the meaning ascribed to the term
"Event of Default" in the Serial Indenture or the Term Indenture.
"Indenture Trustees" means the Serial Indenture Trustee and the Term
Indenture Trustee, collectively.
"Indentures" means the Serial Indenture and the Term Indenture,
collectively.
"Initial Charter" means, for each Vessel, the bareboat charter
between the related Owner and Chevron Transport dated the Closing Date, as the
same may be amended from time to time.
"Initial Charter Guarantee" means, for any Vessel, the
Guarantee, dated the date of the related Initial Charter, given by Chevron to
the related Owner in connection with the related Initial Charter.
"Initial Charter Period" means for any Initial Charter the
period from the date of commencement of such Initial Charter to the expiration
or earlier termination of such Initial Charter pursuant to the terms and
conditions thereof.
"Initial Charterer" means, for each Initial Charter, Chevron
Transport as the Charterer thereunder, and any permitted successor or assignee
thereof.
"Initial Revenue Account" means the account established and
maintained by the Collateral Trustee pursuant to Section 3.01(a).
"Issue of One Debenture" means, for each Owner, the Issue of
One Debenture, dated the Closing Date, between such Owner and California
Petroleum, as the same may be amended from time to time.
"Lien" means with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such asset. For the purposes of this Collateral Agreement, a Person shall be
deemed to own subject to a Lien any asset which it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
asset.
"Loan Agreements" means the Serial Loan Agreements and the Term
Loan Agreements, collectively.
"Majority Noteholders" means at any time the holders of Serial
Mortgage Notes and Term Mortgage Notes then Outstanding having an aggregate
principal amount in excess of 50% of the aggregate principal amount of all such
Notes then Outstanding.
"Majority Serial Noteholders" means at any time the holders of
Serial Mortgage Notes then Outstanding having an aggregate principal amount in
excess of 50% of the aggregate principal amount of all such Serial Mortgage
Notes then Outstanding.
"Majority Term Noteholders" means at any time the holders of
Term Mortgage Notes then Outstanding having an aggregate principal amount in
excess of 50% of the aggregate principal amount of all such Term Mortgage
Notes then Outstanding.
"Management Agreement" means, for each Owner, the Management
Agreement, dated the Closing Date, among such Owner, the Manager and the
Technical Advisor, as the same may be amended from time to time.
"Management Fee" means the sum of (i) for each Vessel, an
annual fee payable to the Manager, semi-annually in arrears, which shall be an
amount equal to $16,000 per annum during the period from the Closing Date to
the third anniversary of the Closing Date plus (ii) a fee of $3,500 per annum,
payable annually in arrears, during such three-year period. Thereafter, the
Management Fee shall be adjusted as provided in the Management Agreement.
"Manager" means, for any Management Agreement, P.D. Gram & Co.
ans, or any other Person acting from time to time as Manager thereunder.
"Moody's" means Moody's Investors Service, Inc.
"Mortgage" means, for each Vessel, the First Preferred Ship
Mortgage or Statutory Mortgage and Deed of Covenants for such Vessel, as
applicable, dated the date of the related Initial Charter, between the related
Owner and California Petroleum and assigned by California Petroleum to the
Collateral Trustee, as the same may be amended from time to time.
"Mortgage Event of Default" means, for any Mortgage, each of
the events designated as an "Event of Default" in Section 5.01 of such
Mortgage.
"Noteholders" means at any time the holders of the Outstanding
Serial Mortgage Notes and the Outstanding Term Mortgage Notes, collectively.
"Notes" means the Serial Mortgage Notes together with the Term
Mortgage Notes.
"Operating Account" means the account established and
maintained by the Collateral Trustee pursuant to Section 3.01(d).
"Outstanding" means, when used with respect to Secured Obligations,
any Secured Obligations then or theretofore issued or incurred by California
Petroleum, except Secured Obligations or portions thereof which have been paid
or defeased (including without limitation, through a covenant defeasance);
provided that, for purposes of determining the parties constituting the
Majority Noteholders, the Majority Serial Noteholders, the Majority Term
Noteholders or the Applicable Secured Parties for purposes of any action to be
taken hereunder, Secured Obligations held by California Petroleum or any
Affiliate thereof, any Owner or any Affiliate thereof, or Chevron or any
Affiliate thereof, shall be disregarded and deemed not to be Outstanding
(except that, in determining whether the Collateral Trustee shall be protected
in relying upon any request, demand, authorization, direction, notice, consent
or waiver, only Secured Obligations which the Collateral Trustee knows to be
so held shall be so disregarded).
"Owner" means CalPetro Tankers (Bahamas I) Limited, in the case
of the Vessel m.t. Samuel Ginn, CalPetro Tankers (Bahamas II) Limited, in the
case of the Vessel m.t. Condoleezza Rice, CalPetro Tankers (IOM) Limited, in
the case of the Vessel m.t. Chevron Mariner, or CalPetro Tankers (Bahamas III)
Limited, in the case of the Vessel m.t. William E. Crain.
"Payment Date" means each _____ and _____, commencing ______,
1995.
"Permitted Investments" means any of the following:
(a) direct general obligations of, or obligations fully and
unconditionally guaranteed as to the timely payment of principal and interest
by, the United States or any agency or instrumentality thereof, provided such
obligations are backed by the full faith and credit of the United States,
Federal Housing Administration debentures, FHLMC senior debt obligations or
FNMA senior debt obligations, but excluding any of such securities whose terms
do not provide for payment of a fixed dollar amount upon maturity or call for
redemption;
(b) federal funds, certificates of deposit, time and demand
deposits and banker's acceptances (having original maturities of not more than
one year) of any bank or trust company incorporated under the laws of the
United States or any state thereof, provided that the short-term debt
obligations of such bank or trust company at the date of acquisitions thereof
have been rated at least "A-1" or "P-1" by Standard & Poor's and Moody's,
respectively;
(c) commercial paper (having original maturities of not more
than one year) rated at least "A-1" or "P-1" by Standard & Poor's and Moody's,
respectively; or
(d) guaranteed investment contracts, investment agreements or
similar agreements rated at least "AA" or "Aa" by Standard & Poor's or
Moody's, respectively, that are treated as indebtedness for United States
federal income tax purposes.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Pledged Stock" means all of the issued and outstanding capital
stock of each Owner, including any additional or substitute shares of capital
stock of any such Owner now owned or hereafter acquired by California Tankers
Investments Limited or any Affiliate of California Tankers Investments Limited
issued at any time or from time to time.
"Rating Agencies" means Moody's, Standard & Poor's and Duff &
Phelps Credit Rating Co.
"Recurring Fees and Taxes" means, for any Vessel, any
registration fees and tonnage taxes necessary to maintain the documentation
of the Vessel under the laws of the registry or port of documentation of
the Vessel, any periodic fees necessary to maintain the corporate status of
the related Owner, any filing or other fees necessary to maintain the
status of such Owner as a reporting company under the Exchange Act and to
comply with any covenants of such Owner under the related Mortgage, any
fees and expenses (including the cost of insurance required by the related
Mortgage and not maintained by the charterer under the charter to which
such Vessel is then subject) necessary to comply with any covenants under
the related Mortgage, any other fees and expenses contemplated to be paid
pursuant to the Management Agreement which the Manager certifies to the
Collateral Trustee are qualified to be paid thereunder and any accounting
or other professional fees and other expenses including any
fees and expenses of the Rating Agencies incurred in connection with the
foregoing. In addition, each Owner's Recurring Fees and Taxes will include
a pro rata portion of the fees and expenses, including any accounting,
administrative or other professional fees, necessary to maintain the
registration of the Notes under the Securities Act, to maintain the
corporate status of California Petroleum and the status of California
Petroleum as a reporting company (if necessary) under the Exchange Act, to
pay any facilitation or management fees and to comply with any covenants
under the Indenture or this Collateral Agreement.
"Second Revenue Account" means the account established and
maintained by the Collateral Trustee pursuant to Section 3.01(b).
"Secured Instruments" means, at any time, (i) the Serial
Indenture and the Outstanding Serial Mortgage Notes and (ii) the Term
Indenture and the Outstanding Term Mortgage Notes.
"Secured Obligations" means at any time, without duplication,
each of the following (to the extent not satisfied or terminated):
(i) all obligations of California Petroleum in respect of the
principal of and interest on the Serial Mortgage Notes;
(ii) all obligations of California Petroleum in respect of the
principal of, premium, if any, and interest on the Term Mortgage
Notes;
(iii) all sums payable by California Petroleum to the
Collateral Trustee and to the Secured Parties hereunder and under the
Collateral Assignments of Charter, the Collateral Assignments of
Guarantee and the Assignments of Mortgage, including Trustee Fees;
(iv) the performance and observance by California Petroleum of
each other term, covenant and other provision to be performed and
observed by it hereunder, under the Collateral Assignments of
Charter, the Collateral Assignments of Guarantee and the Assignments
of Mortgage, or under the Secured Instruments;
(v) all amendments, modifications, renewals, extensions and
replacements of any of the foregoing, in each case whether now
outstanding or hereafter arising.
The Secured Obligations shall include any and all interest, costs, fees and
expenses which accrue on or with respect to any of the foregoing in accordance
with the provisions of the applicable Secured Instrument, whether before or
after the commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of California Petroleum and any such
interest, costs, fees and expenses that would have accrued thereon or with
respect thereto in accordance with the provisions of the applicable Secured
Instrument but for the commencement of any such case, proceeding or other
action.
"Secured Party" means each holder from time to time of the Secured
Obligations (including without limitation any assignees of such holders).
"Securities Act" means the United States Securities Act of
1933, as amended.
"Security Documents" means, for each Vessel, the Loan Agreements,
the Mortgages, the Assignments of Initial Charter, the Assignments of Earnings
and Insurances, the Assignment of Initial Charter Guarantee, the Assignment of
Management Agreement, the Issue of One Debenture, the Stock Pledge, the
Assignment of Vessel Purchase Agreement, and any additional security
agreement, assignment or mortgage document entered into by any Owner from time
to time in connection with such Owner's Loan Agreements.
"Security Interests" means the Liens created in the Collateral
pursuant to this Collateral Agreement and pursuant to each other Security
Document.
"Serial Indenture" means the Serial Indenture dated as of __________
__, 1994 among California Petroleum, the Serial Indenture Trustee, and, solely
for purposes of the Trust Indenture Act, Chevron, as the same may be amended
from time to time.
"Serial Indenture Trustee" means Chemical Trust Company of
California or any other Person from time to time acting as the trustee under
the Serial Indenture.
"Serial Loan Agreement" means, for any Owner, the Serial Loan
Agreement dated as of __________ __, 1994 between such Owner and California
Petroleum, as the same may be amended from time to time.
"Serial Loans" has, for any Owner, the meaning set forth in the
Serial Loan Agreement entered into by such Owner.
"Serial Mortgage Notes" has the meaning set forth in the Serial
Indenture.
"Sinking Fund Reserve Account" means the account established
and maintained by the Collateral Trustee pursuant to Section 3.01(h).
"Standard & Poor's" means Standard & Poor's Ratings Group.
"Stipulated Loss Value" means, for any Vessel on any date, the
amount specified in the related Initial Charter as the "Stipulated Loss Value"
for such date, which amount will be at least sufficient to redeem in full the
Allocated Principal Amount of Notes for such Vessel.
"Stock Pledge" means the Stock Pledge Agreement, dated the
Closing Date, between California Tankers Investments Limited and California
Petroleum, as the same may be amended from time to time.
"Subsidiary" means, with respect to any Person, any corporation
or other entity of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or other
persons performing similar functions are at the time directly or indirectly
owned by such Person.
"Technical Advisor" means, for each Management Agreement,
Barber Ship Management, or any other Person acting from time to time as
Technical Advisor thereunder.
"Technical Advisor's Fee" means, for each Vessel, an annual fee
payable to the Technical Advisor, semi-annually in arrears, which shall be an
amount equal to $12,500 per annum during the period from the Closing Date to
the third anniversary of the Closing Date. Thereafter, the Technical
Advisor's Fee will be adjusted as provided in the Management Agreement.
"Term Indenture" means the Term Indenture dated as of
__________ __, 1994 between California Petroleum and the Term Indenture
Trustee, as the same may be amended from time to time.
"Term Indenture Trustee" means Chemical Trust Company of
California or any other Person from time to time acting as the trustee under
the Term Indenture.
"Term Loan" has, for any Owner, the meaning set forth in the
Term Loan Agreement entered into by such Owner.
"Term Loan Agreement" means, for any Owner, the Term Loan
Agreement dated as of __________ __, 1994 between such Owner and California
Petroleum, as the same may be amended from time to time.
"Term Mortgage Notes" has the meaning set forth in the Term
Indenture.
"Termination Account" means the account established and
maintained by the Collateral Trustee pursuant to Section 3.01(c).
"Termination Payment" means the payment that Chevron Transport
is required to make pursuant to Clause 2(a) of the applicable Initial Charter
if Chevron Transport elects to terminate the Initial Charter for any Vessel on
a specified termination date.
"Total Loss" means (a) an actual or constructive or comprised
or arranged total loss of a Vessel, (b) a Compulsory Acquisition of a Vessel
or (c) if so declared by Chevron Transport at any time and in its sole
discretion a requisition for hire of the Vessel for a period in excess of 180
days.
"Trust Accounts" means the Initial Revenue Account, the Second
Revenue Account, the Termination Account, the Operating Account, the Equity
Account, the Casualty Account, the Collateral Account and the Sinking Fund
Reserve Account.
"Trust Estate" means the property rights and privileges
described in the Granting Clause in this Collateral Agreement.
"Trust Funds" means the funds deposited in the Trust Accounts.
"Trust Indenture Act" means the United States Trust Indenture
Act of 1939, as amended.
"Trustee Fees" means:
(i) reasonable compensation to the Collateral Trustee, to the
extent permitted by law (which shall not be limited by any provision
of law in regard to compensation of fiduciaries or of a trustee of an
express trust), for its services hereunder in administering the Trust
Estate;
(ii) all of the reasonable costs and expenses of the Collateral
Trustee (including, without limitation, the reasonable compensation
and expenses and disbursements of its counsel and of all agents and
other persons not regularly in its employ) (A) in connection with the
preparation, execution and delivery of this Collateral Agreement or
the other Security Documents, any waiver or consent thereunder, any
modification or termination thereof, or any Default or alleged
Default; (B) if an Indenture Event of Default occurs, in connection
with such Indenture Event of Default and collection, bankruptcy,
insolvency and other enforcement proceedings relating thereto; (C) in
connection with the administration or protection of the Trust Estate,
the sale or other disposition of any Collateral or the preservation,
protection or defense of the Collateral Trustee's rights under the
Security Documents or in and to the Trust Estate; or (D) in
connection with any removal pursuant to subsection 6.07(a);
(iii) the net amount of taxes (after taking account of any
deduction, credit or other tax reduction or benefit available by
reason of the imposition of any such tax) in any jurisdiction in
which the Collateral Trustee would not otherwise be subject to tax
except by reason of its acting as mortgagee or secured party (and not
as owner or operator) under any Security Document (directly or
through agents, separate trustees or co-trustees); provided that this
clause (iii) (a) shall apply only (1) in respect of taxes
attributable to the performance of the Collateral Trustee's
obligations as Collateral Trustee hereunder and (2) to the extent that
the Collateral Trustee, using reasonable efforts, shall have been
unable to avoid or minimize the same as contemplated by Section 6.10
and (b) shall in no event cover any federal, state, local or other
taxes imposed upon the Collateral Trustee with respect to or measured
by its net income or profits;
(iv) any stamp documentary, excise, recording, transfer or any
other similar tax and any penalties or interest with respect thereto,
which may be assessed, levied or collected by any jurisdiction in
connection with any Security Document, any Secured Obligations, the
Trust Estate or any Collateral or the sale or other disposition
thereof;
(v) any and all costs and expenses in respect of any and all
search, filing, recording and registration and similar fees, taxes,
charges, costs and expenses in connection with the filing, recording,
registration, perfection or termination any Security Document, any
financing statement or other document relating thereto, or any Lien
contemplated or perfected thereby and all costs and expenses for any
Lien, financing statement, title or other similar search relating to
the Collateral, California Petroleum, any Owner or any other Person
owning or holding any Collateral or any interest therein; and
(vi) any and all liabilities, obligations, losses, damages,
penalties, judgments, actions, suits, proceedings, reasonable costs
and expenses (including reasonable fees and disbursements of counsel)
of any kind whatsoever which may be incurred by the Collateral
Trustee in connection with any investigative, administrative or
judicial proceeding (whether or not such indemnified party is
designated a party to such proceeding) relating to the Trust Estate,
the Collateral, the Security Documents or the Secured Instruments,
provided that the Collateral Trustee shall not have the right to
payment hereunder for its own negligence or bad faith as determined
by a court of competent jurisdiction.
"UCC" means the Uniform Commercial Code as in effect on the
date hereof in the State of New York or any other applicable jurisdiction.
"Vessel Purchase Agreement" means, for any Vessel, the Vessel
Purchase Agreement, dated the Closing Date between Chevron Transport and the
related Owner.
"Vessels" means, collectively, the four Suezmax-size tankers to
be acquired by the Owners and chartered to Chevron Transport pursuant to the
Initial Charters.
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Collateral Agreement refer to this Collateral
Agreement as a whole and not to any particular provision of this Collateral
Agreement, and Article, Section and subsection references are to this
Collateral Agreement unless otherwise specified.
Section 1.02 Limitation of Rights. Nothing in this
Collateral Agreement or in the Secured Instruments, expressed or implied, is
intended or shall be construed to confer upon or give to any Person other than
the Collateral Trustee and the Secured Parties any right, remedy or claim
under or by reason of this Collateral Agreement or any covenant, condition or
stipulation herein contained, and all the covenants, stipulations, promises
and agreements in this Collateral Agreement, the Collateral Assignments of
Charter, the Collateral Assignments of Guarantee and the Assignments of
Mortgage by or on behalf of California Petroleum shall be for the sole and
exclusive benefit of the Collateral Trustee and the Secured Parties.
Section 1.03 Effectiveness of Collateral Agreement. This
Collateral Agreement shall become effective simultaneously with the earlier of
the effectiveness of the Term Indenture or the effectiveness of the Serial
Indenture. All references herein to the "date hereof" or other similar
language shall mean the date of the effectiveness hereof and not the date
appearing on the cover or the caption of this Collateral Agreement (which date
is for identification purposes only).
ARTICLE TWO
ENFORCEMENT NOTICE; EXERCISE
OF REMEDIES; DETERMINATIONS
PRIOR TO ENFORCEMENT
Section 2.01 Enforcement Notice. (a) An Enforcement
Notice shall become effective upon receipt thereof (or deemed receipt thereof)
by the Collateral Trustee. An Enforcement Notice, once effective, shall
remain in effect unless and until it is cancelled as provided in subsection
2.01(c).
(b) So long as an Enforcement Notice is in effect, subject to the
provisions of Sections 2.04(b) and (c), the Collateral Trustee shall exercise
the rights and remedies provided in this Collateral Agreement, the Collateral
Assignments of Charter, the Collateral Assignments of Guarantee and the
Assignments of Mortgage. The Collateral Trustee is not empowered to exercise
any remedy hereunder unless an Enforcement Notice is in effect.
(c) The applicable Indenture Trustee (acting on the instructions of
the Majority Serial Noteholders or the Majority Term Noteholders, as the case
may be) shall be entitled to cancel any Enforcement Notice theretofore given
by it by delivering a written notice of cancellation to the Collateral Trustee
(i) before the Collateral Trustee takes any action to exercise any remedy with
respect to the Collateral or (ii) thereafter, if the Collateral Trustee
believes that all actions it has taken to exercise any remedy or remedies with
respect to the Collateral can be reversed without undue difficulty or is
reasonably assured that it is adequately indemnified for any loss incurred by
the Collateral Trustee resulting from such reversal.
(d) As soon as practicable after, but in any event within three
Business Days of, its receipt of any Enforcement Notice, the Collateral
Trustee shall give notice thereof to California Petroleum and the Indenture
Trustees. As soon as practicable after, but in any event within three
Business Days of, the cancellation of any Enforcement Notice pursuant to
subsection (c) above, the Collateral Trustee shall give notice thereof to
California Petroleum and the Indenture Trustees.
Section 2.02 General Authority of the Collateral Trustee
Over the Collateral. California Petroleum hereby irrevocably constitutes and
appoints the Collateral Trustee and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full power
and authority in the name of California Petroleum or in its own name, from
time to time in the Collateral Trustee's discretion, so long as any
Enforcement Notice is in effect, to take any and all appropriate action
directed by the Applicable Secured Parties and to execute any and all
documents and instruments which may be necessary or desirable to carry out the
terms hereof and accomplish the purposes hereof and, without limiting the
generality of the foregoing or any of the rights conferred on the Collateral
Trustee, whether in its own right or as assignee of California Petroleum,
pursuant to the other Security Documents, California Petroleum hereby gives
the Collateral Trustee the power and right on its behalf, without notice to
or further assent by California Petroleum, so long as any Enforcement Notice
is in effect, to do the following (to the extent the Collateral Trustee is
directed to do so by the Applicable Secured Parties):
(i) to ask for, demand, sue for, collect, receive and give
acquittance for any and all moneys due or to become due upon, or in
connection with, the Collateral;
(ii) to receive, take, endorse, assign and deliver any and all
checks, notes, drafts, acceptances, documents and other negotiable and
non-negotiable instruments taken or received by the Collateral
Trustee as, or in connection with, the Collateral;
(iii) to commence, prosecute, defend, settle, compromise,
compound or adjust any claim, suit, action or proceeding with respect
to, or in connection with, the Collateral;
(iv) to sell, transfer, assign or otherwise deal in or with the
Collateral or any part thereof as fully and effectively as if the
Collateral Trustee were the absolute owner thereof;
(v) to do, at its option and at the expense and for the account
of California Petroleum, at any time or from time to time, all acts
and things which the Collateral Trustee shall deem necessary or
advisable to protect or preserve the Collateral and to realize upon
the Collateral;
(vi) to extend the time of payment of any or all of the
Collateral and to make any allowance and other adjustments with
reference thereto; and
(vii) to exercise any of the remedies set forth in the Security
Documents;
provided that the Collateral Trustee shall give California Petroleum not less
than thirty days prior written notice of the time and place of any sale or
other intended disposition of any Collateral. California Petroleum agrees
that such notice constitutes "reasonable notification" within the meaning of
Section 9-504(3) of the UCC.
Section 2.03 Right To Initiate Judicial Proceedings. If
an Enforcement Notice is in effect, the Collateral Trustee, subject to the
provisions of Section 2.04(b) and (c), (i) shall have the right and power to
institute and maintain such suits and proceedings as it may deem appropriate
to protect and enforce the rights vested in it by this Collateral Agreement
and each Security Document and (ii) may either after entry, or without entry,
proceed by suit or suits at law or in equity to enforce such rights and to
foreclose upon the Collateral and to sell all or, from time to time, any of
the Collateral under the judgment or decree of a court of competent
jurisdiction.
Section 2.04 Exercise of Powers; Instructions. (a) All of
the powers, remedies and rights of the Collateral Trustee as set forth in this
Collateral Agreement may be exercised by the Collateral Trustee in respect of
any other Security Document as though set forth in full therein and all of the
powers, remedies and rights of the Collateral Trustee set forth in any other
Security Document may, subject to Sections 2.04(b) and (c), be exercised from
time to time as herein and therein provided.
(b) Subject to Section 2.04(c), the Applicable Secured Parties
shall have the right, by one or more instruments in writing executed and
delivered to the Collateral Trustee, to direct the time, method and place of
conducting any proceeding for any right or remedy available to the Collateral
Trustee, or of exercising any trust or power conferred on the Collateral
Trustee, or for the appointment of a receiver, or to direct the taking or the
refraining from taking of any action authorized by any Security Document;
provided that (i) such direction shall not conflict with any provisions of
law, of any Security Document or, if applicable, the Indentures and (ii) the
Collateral Trustee shall be adequately secured and indemnified as provided in
Section 6.04(d). Upon the delivery of any such instrument to the Collateral
Trustee, the Applicable Secured Parties delivering such instrument shall
deliver a copy thereof to California Petroleum and the Indenture Trustees.
Following receipt of any such instrument the Collateral Trustee shall have the
right in its discretion to take any action or omit to take any action which it
deems proper and which is not inconsistent with such direction. The
Collateral Trustee shall have no duty to take or refrain from taking any
action unless explicitly required herein or as instructed in writing as
provided herein.
(c) Notwithstanding anything to the contrary contained herein
or in any other Security Document, so long as any Serial Mortgage Notes are
Outstanding, if the Allocated Principal Amount of Serial Mortgage Notes
relating to a Vessel has been paid in full and an Enforcement Notice has been
delivered under the Term Indenture as a result of (i) a default under any
Acceptable Replacement Charter or other charter relating to such Vessel or
(ii) a Mortgage Event of Default relating to such Vessel, the Collateral
Trustee may not pursue any remedies which the Collateral Trustee otherwise
would be entitled to exercise pursuant to this Article with respect to any
Initial Charter that is not then in default and that has not reached its first
optional termination date, including amounts paid or payable thereunder, and
the related Security Documents.
Section 2.05 Remedies Not Exclusive. (a) No remedy
conferred upon or reserved to the Collateral Trustee hereunder and under the
Collateral Assignments of Charter, the Collateral Assignments of Guarantee and
the Assignments of Mortgage is intended to be exclusive of any other remedy
or remedies, but every such remedy shall be cumulative and shall be in
addition to every other remedy conferred in any Security Document or now or
hereafter existing at law or in equity or by statute.
(b) No delay or omission by the Collateral Trustee to exercise any
right, remedy or power hereunder or under any other Security Document shall
impair any such right, remedy or power or shall be construed to be a waiver
thereof, and every right, power and remedy given by any Security Document to
the Collateral Trustee may, subject to Sections 2.04(b) and (c), be exercised
from time to time and as often as may be deemed expedient by the Collateral
Trustee.
(c) If the Collateral Trustee shall have undertaken to enforce any
right, remedy or power under any Security Document and such enforcement shall
have been discontinued, stayed, enjoined or abandoned for any reason or shall
have been determined adversely to the Collateral Trustee in any related
judicial proceedings, then California Petroleum, the Collateral Trustee and
the Secured Parties shall, subject to any determination in such proceeding,
severally and respectively be restored to their former positions and rights
hereunder with respect to the Trust Estate and in all other respects, and
thereafter all rights, remedies and powers of the Collateral Trustee shall
continue as though no such action had been taken.
(d) All rights of action and of asserting claims upon or under the
Security Documents may be enforced by the Collateral Trustee without the
possession of any Secured Instrument or instrument evidencing any Secured
Obligation or the production thereof at any trial or other proceeding relative
thereto, and any suit or proceeding instituted by the Collateral Trustee shall
be, subject to Sections 6.05(d) and 6.10(b)(ii), brought in its name as
Collateral Trustee and any recovery of judgment shall be held and applied as
part of the Trust Estate.
Section 2.06 Waiver and Estoppel. (a) California
Petroleum, to the extent it may lawfully do so, (i) agrees that it will not at
any time, in any manner whatsoever, claim or take the benefit or advantage of
any appraisement, valuation, stay, extension, moratorium, turnover or
redemption law, or any law permitting it to direct the order in which the
Collateral shall be sold, now or at any time hereafter in force, which may
delay, prevent or otherwise affect the performance or enforcement of any
Security Document, (ii) hereby waives all benefit or advantage of all such
laws and covenants and (iii) agrees that it will not hinder, delay or impede
the execution of any power granted to the Collateral Trustee, in its own right
or as assignee of California Petroleum, in any Security Document but will
suffer and permit the execution of every such power as though no such law were
in force.
(b) California Petroleum, to the extent it may lawfully do so, on
behalf of itself and all who claim through or under it, including, without
limitation, the Owners, any and all subsequent creditors, vendees, assignees
and Lienors, waives and releases all rights to demand or to have any
marshalling of the Collateral upon any sale, whether made under any power of
sale granted in any Security Document or pursuant to judicial proceedings or
upon foreclosure or any enforcement of any Security Document and consents and
agrees that all the Collateral may at any such sale be offered and sold as an
entirety.
(c) California Petroleum waives, to the extent permitted by
applicable law, presentment, demand, protest and any notice of any kind
(except notices explicitly required under any Security Document) in connection
with the Security Documents and any action taken by the Collateral Trustee
with respect to the Collateral.
Section 2.07 Determinations Prior to Enforcement. Except
as otherwise specifically provided herein, the Indenture Trustees shall have
the exclusive authority to direct the conduct of the Collateral Trustee with
respect to (i) any written request under any Security Document for consent or
approval with respect to any matter or thing relating to any Collateral or any
other Person's obligations with respect thereto or (ii) any nonperformance by
any Person of any covenant or any breach of any representation or warranty
thereof set forth in any Security Document.
Section 2.08 Limitation on Collateral Trustee's Duty in
Respect of Collateral. Beyond its duties as to the custody thereof expressly
provided herein or in any Security Document and to account to the Secured
Parties and California Petroleum for moneys and other property received by it
under any Security Document, the Collateral Trustee shall not have any duty to
California Petroleum or to the Secured Parties as to any Collateral in its
possession or control or in the possession or control of any of its agents or
nominees, or any income thereon or as to the preservation of rights against
prior parties or any other rights pertaining thereto. The Collateral Trustee
shall be deemed to have exercised reasonable care in the custody of the
Collateral in its possession if the Collateral is accorded treatment
substantially equal to that which it accords its own property.
Section 2.09 Limitation by Law. All rights, remedies and
powers provided herein may be exercised only to the extent that the exercise
thereof does not violate any applicable provision of law, and all the
provisions hereof are intended to be subject to all applicable mandatory
provisions of law which may be controlling and to be limited to the extent
necessary so that they will not render this Collateral Agreement invalid,
unenforceable in whole or in part or not entitled to be recorded, registered
or filed under provisions of any applicable law.
ARTICLE THREE
THE TRUST ACCOUNTS; DISTRIBUTIONS
Section 3.01 The Trust Accounts. (a) There is hereby
established and, at all times hereafter until the earlier of the payment in
full of the Secured Obligations under the Serial Indenture or the termination
of the trusts created by this Collateral Agreement, there shall be maintained
with the Collateral Trustee at the corporate trust office of the Collateral
Trustee, a trust account (the "Initial Revenue Account") in the name and under
the control of the Collateral Trustee for the benefit of the Indenture
Trustees for the benefit of holders of the Serial Mortgage Notes and the Term
Mortgage Notes equally and ratably into which there shall be deposited, until
the first termination date under each Initial Charter any Charterhire payments
under such Initial Charter.
(b) There is hereby established and, at all times hereafter until
the trusts created by this Collateral Agreement shall have terminated, there
shall be maintained with the Collateral Trustee at the corporate trust office
of the Collateral Trustee, a trust account (the "Second Revenue Account") in
the name and under the control of the Collateral Trustee for the benefit of
the Term Indenture Trustee for the benefit of holders of the Term Mortgage
Notes equally and ratably into which there shall be deposited for each Vessel
(i) if the Initial Charter relating to such Vessel is terminated, any
Charterhire payments under any Acceptable Replacement Charter or other charter
for such Vessel and (ii) if the Initial Charter relating to such Vessel
continues in effect after the Allocated Principal Amount of the Serial
Mortgage Notes relating to such Vessel have been paid in full, any Charterhire
payments under such Initial Charter.
(c) There is hereby established and, at all times hereafter
until the trusts created by this Collateral Agreement shall have terminated,
there shall be maintained with the Collateral Trustee at the corporate trust
office of the Collateral Trustee, a trust account (the "Termination Account")
in the name and under the control of the Collateral Trustee for the benefit of
the Term Indenture Trustee for the benefit of holders of the Term Mortgage
Notes equally and ratably into which there shall be deposited for each Vessel,
if the related Initial Charter is terminated at the option of the Initial
Charterer the Termination Payment payable under such Initial Charter. Any net
proceeds from the sale, if any, of a Vessel for which the related Initial
Charter has reached its first optional termination date shall be deposited
into the Termination Account to be used along with the related Termination
Payment (and any excess amounts referred to in the next succeeding sentence
arising from previous Vessel sales and remaining in the Termination Account)
in connection with the related mandatory redemption, if any, of Term Mortgage
Notes pursuant to Section 10.1(d) of the Term Indenture. The excess, if any,
relating to such Vessel over the amount necessary to pay all amounts due and
payable in connection with such related mandatory redemption, shall be
disbursed by the Collateral Trustee, to the extent necessary on each
succeeding Payment Date, to make payments designated to be made from the
Termination Account on such Payment Date pursuant to this Section 3.01(c),
Section 3.03(b) or (c), or Section 3.04 as the case may be.
Any Termination Payment deposited into the Termination Account
shall be disbursed by the Collateral Trustee (i) if a notice of mandatory
redemption is delivered by the Owners as a result of such termination, in
accordance with Section 10.1(d) of the Term Indenture or (ii) if a notice of
mandatory redemption is not delivered by the Owners as a result of such
termination, to the extent necessary on each succeeding Payment Date, to make
payments designated to be made from the Termination Account on such Payment
Date pursuant to Section 3.03(b) or (c), as the case may be.
(d) There is hereby established and, at all times hereafter
until the trusts created by this Collateral Agreement shall have terminated,
there shall be maintained with the Collateral Trustee at the corporate trust
office of the Collateral Trustee, a trust account (the "Operating Account") in
the name and under the control of the Collateral Trustee into which the
Collateral Trustee shall deposit for each Vessel, pursuant to Section 3.03(a),
(b) or (c), as the case may be, for the applicable Payment Date, the Recurring
Fees and Taxes, the Management Fee and the Technical Advisor's Fee. Funds
deposited into the Operating Account on each Payment Date will be disbursed by
the Collateral Trustee (i) from time to time, to pay the Recurring Fees and
Taxes for each Vessel as such amounts become due and payable upon presentation
of invoices therefor pursuant to the Management Agreement, (ii) to pay the
Management Fee for each Vessel to the Manager and (iii) to pay the Technical
Advisor's Fee for each Vessel to the Technical Advisor; provided that the
Management Fee and the Technical Advisor's Fee shall be payable only to the
extent that the funds remaining in the Operating Account after any such
payment would be sufficient to pay the Recurring Fees and Taxes for the
applicable period.
(e) There is hereby established and, at all times hereafter
until the trusts created by this Collateral Agreement shall have terminated,
there shall be maintained with the Collateral Trustee at the corporate trust
office of the Collateral Trustee, a trust account (the "Equity Account") in
the name and under the control of the Collateral Trustee into which the
Collateral Trustee shall deposit, pursuant to Section 3.03(a), (b) or (c), as
the case may be, for each Equity Transfer Date, the Equity Remainder, if any,
for each Vessel. Any balance remaining in the Equity Account after payment in
full of all of the Secured Obligations shall be disbursed promptly thereafter
to the Owners, pro rata.
(f) There is hereby established and, at all times hereafter
until the trusts created by this Collateral Agreement shall have terminated,
there shall be maintained with the Collateral Trustee at the corporate trust
office of the Collateral Trustee, a trust account (the "Casualty Account") in
the name and under the control of the Collateral Trustee into which there
shall be deposited, pursuant to the provisions of the related Security
Documents, any insurance proceeds or other payments in connection with the
occurrence of a Total Loss to any Vessel. Amounts deposited in the Casualty
Account will be disbursed by the Collateral Trustee in accordance with Section
11.1(b) of the Serial Indenture and Section 10.1(c) of the Term Indenture,
respectively.
(g) There is hereby established and, at all times hereafter
until the trusts created by this Collateral Agreement shall have terminated,
there shall be maintained with the Collateral Trustee at the corporate trust
office of the Collateral Trustee, a trust account (the "Collateral Account")
in the name and under the control of the Collateral Trustee into which there
shall be deposited from time to time (i) the cash proceeds of any sale of, or
other realization upon, all or any part of the Collateral upon the exercise by
the Collateral Trustee of any of the rights and remedies described in Article
Two upon receipt of an Enforcement Notice and (ii) any other amount received
by the Collateral Trustee pursuant to any of the Security Documents for which
this Collateral Agreement does not specify another Trust Account into which
such amount is to be deposited. Any net proceeds from the sale, if any, of a
Vessel for which the related Initial Charter has been terminated that are in
excess of the amount necessary to pay all amounts due and payable in
connection with the related mandatory redemption, shall be deposited into the
Termination Account and disbursed by the Collateral Trustee, to the extent
necessary on each succeeding Payment Date, to make payments designated to be
made from the Termination Account on such Payment Date pursuant to Section
3.03(b) or (c), as the case may be, or to make Permitted Payments pursuant to
Section 3.03(d).
While an Enforcement Notice is in effect, all moneys which are
required by any Security Document to be delivered to the Collateral Trustee or
which are received by the Collateral Trustee or any agent or nominee of the
Collateral Trustee in respect of the Collateral, whether in connection with
the exercise of the remedies provided in any Security Document or otherwise,
shall be deposited in the Collateral Account and held by the Collateral
Trustee as part of the Trust Estate and applied in accordance with the terms
of this Collateral Agreement; provided that any moneys received by the
Collateral Trustee for deposit in any other Trust Account which is received
pursuant to the Security Documents relating to any Initial Charter that is not
then in default and that has not reached its first optional termination date,
including amounts paid or payable thereunder, shall be deposited in such other
Trust Account and applied in accordance with the provisions applicable to such
other Trust Account; provided further that notwithstanding anything in this
Section 3.03(g) to the contrary, all such moneys relating to Collateral with
respect to which the Lien of the Serial Indenture has been released shall be
deposited in the Termination Account and applied in accordance with the terms
of this Collateral Agreement.
(h) There is hereby established and, at all times hereafter
until the trusts created by this Collateral Agreement shall have terminated,
there shall be maintained with the Collateral Trustee at the corporate trust
office of the Collateral Trustee, a trust account (the "Sinking Fund Reserve
Account") in the name and under the control of the Collateral Trustee for the
benefit of the Term Indenture Trustee for the benefit of holders of the Term
Mortgage Notes equally and ratably into which there shall be deposited from
time to time pursuant to Section 3.03(b) or (c), as the case may be, for each
Payment Date that is not a sinking fund redemption date or a date for the
final payment of principal on the Term Mortgage Notes, an amount, if any,
equal to one-half of the aggregate sinking fund redemption amount or amount of
principal due and payable on the Term Mortgage Notes on the next succeeding
Payment Date. Any balance remaining in the Sinking Fund Reserve Account after
payment in full of all of the Secured Obligations shall be disbursed promptly
thereafter to the Owners, pro rata.
(i) Any income received by the Collateral Trustee with respect
to the balance from time to time standing to the credit of any Trust Account,
including any interest or capital gains on Permitted Investments, shall
remain, or be deposited, in such Trust Account. All cash amounts on deposit
from time to time in the Trust Accounts, together with any Permitted
Investments from time to time made with amounts on deposit therein as provided
herein shall constitute part of the Collateral. The deposit or holding of
such amounts in any Trust Account shall not constitute payment of the Secured
Obligations until applied to such Secured Obligations as provided herein.
Section 3.02 Investment of Funds Deposited in Trust
Accounts. Amounts on deposit in the Trust Accounts shall be invested and
re-invested from time to time in such Permitted Investments as the Collateral
Trustee shall determine in its sole discretion, which Permitted Investments
shall be held in the name and be under the control of the Collateral Trustee.
In order to provide the Collateral Trustee, for the benefit of the Secured
Parties, with a perfected security interest in any Permitted Investment, each
Permitted Investment shall be either:
(A) evidenced by negotiable certificates or instruments, or if
non-negotiable then issued in the name of the Collateral Trustee,
which (together with any appropriate instruments of transfer) are
delivered to, and held by, the Collateral Trustee or any agent
thereof in the State of New York; or
(B) in book-entry form and issued by the United States and
subject to pledge under applicable state law and Treasury regulations
and as to which (in the opinion of counsel to the Collateral Trustee)
appropriate measures shall have been taken for perfection of the
Security Interests.
In the absence of gross negligence or willful misconduct, the Collateral
Trustee shall not be responsible for any loss resulting from any such
investment.
Section 3.03 Payment Dates.
(a) On each Payment Date on or prior to ____, 2002, the
Collateral Trustee shall withdraw funds from the Initial Revenue Account and
then from the Equity Account (except for clause (vii) below) and make the
payments set forth below in the following order, in each case to the extent
funds are available after the preceding payment has been made in full:
(i) to deposit into the Operating Account the amount of the
Recurring Fees and Taxes then due and payable for each Vessel, or
which will become due and payable prior to the next succeeding
Payment Date;
(ii) to pay all interest then due and payable on the Serial
Mortgage Notes to the holders of the Serial Mortgage Notes, ratably
in the proportion that the amount of such payment then due under each
such Serial Mortgage Note bears to the aggregate amount of the
payments then due under all such Serial Mortgage Notes;
(iii) if such Payment Date is the maturity date for any Serial
Mortgage Notes, to pay the aggregate amount of principal then due and
payable on such Serial Mortgage Notes to the holders of such Serial
Mortgage Notes, ratably in the proportion that the amount of such
principal then due under each such Serial Mortgage Note bears to the
aggregate amount of such principal then due under all such Serial
Mortgage Notes;
(iv) to pay all interest then due and payable on the Term
Mortgage Notes to the holders of the Term Mortgage Notes, ratably in
the proportion that the amount of such payment then due under each
such Term Mortgage Note bears to the aggregate amount of the payments
then due under all such Term Mortgage Notes;
(v) to pay to the Indenture Trustees and the Collateral
Trustee, respectively, the fees and expenses then due and payable
under the Indentures to the Indenture Trustees and under the
Collateral Agreement to the Collateral Trustee;
(vi) to deposit into the Operating Account the Management Fee
and the Technical Advisor's Fee then due and payable for each Vessel;
and
(vii) if such Payment Date is an Equity Transfer Date, to the
extent funds are available, to deposit the Equity Remainder for each
Vessel into the Equity Account.
After the foregoing payments have been made, the Collateral
Trustee shall invest (and reinvest, as applicable) any balance remaining in
the Initial Revenue Account and the Equity Account in Permitted Investments
that will mature on or before the next succeeding Payment Date.
(b) On each Payment Date that occurs after __________ __, 2002
and on or before __________ __, 2005, the Collateral Trustee shall withdraw
funds from the Initial Revenue Account, the Second Revenue Account, the
Termination Account, the Sinking Fund Reserve Account, the Equity Account, or
the applicable combination of the foregoing indicated below, as the case may
be, and make the payments set forth below in the following order, in each case
to the extent funds are available in the applicable Trust Accounts after the
preceding payment has been made in full:
(i) deposit into the Operating Account the amount of the
Recurring Fees and Taxes then due and payable, or which will become
due and payable prior to the next succeeding Payment Date for each
Vessel then subject to an Initial Charter that has not reached its
first optional termination date, first from the Initial Revenue
Account and then from the Equity Account, in each case to the extent
of the funds available therein;
(ii) to pay first from the Initial Revenue Account and then from
the Equity Account, in each case to the extent of the funds available
therein, all interest then due and payable on the Serial Mortgage
Notes to the holders of the Serial Mortgage Notes, ratably in the
proportion that the amount of such payment then due under each such
Serial Mortgage Note bears to the aggregate amount of the payments
then due under all such Serial Mortgage Notes;
(iii) if such Payment Date is the maturity date for any Serial
Mortgage Notes, to pay from the Initial Revenue Account and then from
the Equity Account, in each case to the extent of the funds available
therein, the aggregate amount of principal then due and payable on
such Serial Mortgage Notes to the holders of such Serial Mortgage
Notes, ratably in the proportion that the amount of such principal
then due under each such Serial Mortgage Note bears to the aggregate
amount of such principal then due under all such Serial Mortgage
Notes;
(iv) to pay first from the Initial Revenue Account and then from
the Equity Account, in each case to the extent of the funds available
therein, all interest then due and payable on the Allocated Principal
Amount of Term Mortgage Notes for each Vessel then subject to an
Initial Charter that has not reached its first optional termination
date to the holders of the Term Mortgage Notes, ratably in the
proportion that the amount of such payment then due under each such
Term Mortgage Note bears to the aggregate amount of the payments then
due under all such Term Mortgage Notes;
(v) to deposit into the Operating Account the amount of the
Recurring Fees and Taxes then due and payable, or which will become
due and payable prior to the next succeeding Payment Date for each
Vessel for which the related Initial Charter has reached its first
optional termination date, first from the Second Revenue Account,
then from the Termination Account and then from the Equity Account,
in each case to the extent of the funds available therein;
(vi) to pay first from the Second Revenue Account, then from the
Termination Account and then from the Equity Account, in each case to
the extent of the funds available therein, all interest then due and
payable on the Allocated Principal Amount of the Term Mortgage Notes
for each Vessel which has reached the first optional termination date
under its Initial Charter to the holders of the Term Mortgage Notes,
ratably in the proportion that the amount of such payment then due
under each such Term Mortgage Note bears to the aggregate amount of
the payments then due under all such Term Mortgage Notes;
(vii) (A) if such Payment Date is a sinking fund redemption date
or a date for the payment of principal on the Term Mortgage Notes, to
pay first from the Sinking Fund Reserve Account, then from the Second
Revenue Account, then from the Termination Account and then from the
Equity Account, in each case to the extent of the funds available
therein, the aggregate sinking fund redemption amount or amount of
principal then due and payable on the Term Mortgage Notes, ratably,
in the case of payment due on maturity, in the proportion that the
amount of such payment then due under each such Term Mortgage Note
bears to the aggregate amount of the payment then due under all such
Term Mortgage Notes and (B) if such Payment Date is not a sinking
fund redemption date or a date for the payment of principal on the
Term Mortgage Notes, to deposit into the Sinking Fund Reserve Account
first from the Second Revenue Account, then from the Termination
Account and then from the Equity Account, in each case to the extent
of the funds available therein, an amount, if any, equal to one-half
of the aggregate sinking fund redemption amount or amount of
principal due and payable on the Term Mortgage Notes on the next
succeeding Payment Date;
(viii) to pay first from the Initial Revenue Account and then from
the Equity Account, in each case to the extent of the funds available
therein, to the Indenture Trustee and the Collateral Trustee,
respectively, the portion of the aggregate amount of the fees and
expenses then due under the Indentures to the Indenture Trustee and
under the Collateral Agreement to the Collateral Trustee, calculated
by multiplying the aggregate amount of such fees and expenses by a
fraction, the numerator of which is the number of Vessels then
subject to Initial Charters that have not reached their respective
first optional termination date and the denominator of which is the
total number of Vessels then subject to a Mortgage;
(ix) to pay to the Indenture Trustee, and the Collateral
Trustee, respectively, first from the Second Revenue Account, then
from the Termination Account and then from the Equity Account, in
each case to the extent of the funds therein, the portion of the
aggregate amount of the fees and expenses then due under the
Indentures to the Indenture Trustee and under the Collateral
Agreement to the Collateral Trustee, calculated by multiplying the
aggregate amount of such fees and expenses by a fraction, the
numerator of which is the number of Vessels for which the Initial
Charters have reached their respective first optional termination
date and the denominator of which is the total number of Vessels then
subject to a Mortgage;
(x) to deposit into the Operating Account first from the
Initial Revenue Account and then from the Equity Account, to the
extent of the funds available therein, the Management Fee and the
Technical Advisor's Fee then due and payable for each Vessel then
subject to an Initial Charter that has not reached its first optional
termination date;
(xi) to deposit into the Operating Account first from the Second
Revenue Account, then from the Termination Account and then from the
Equity Account, in each case to the extent of the funds available
therein, the Management Fee and the Technical Advisor's Fee then due
and payable for each Vessel for which the related Initial Charter has
reached its first optional termination date;
(xii) if such Payment Date is an Equity Transfer Date, to
withdraw from the Initial Revenue Account, to the extent funds are
available, and to deposit into the Equity Account the Equity
Remainder for each Vessel then subject to an Initial Charter that has
not reached its first optional termination date; and
(xiii) if such Payment Date is an Equity Transfer Date, to
withdraw first from the Second Revenue Account and then from the
Termination Account, in each case to the extent of the funds
available therein, and to deposit into the Equity Account the Equity
Remainder for each Vessel for which the related Initial Charter has
reached its first optional termination date.
After the foregoing payments have been made, the Collateral
Trustee shall invest (and reinvest, as applicable) any balance remaining in
each of the Initial Revenue Account (if such Payment Date is not the date upon
which the Serial Mortgage Notes are paid in full), the Second Revenue Account,
the Equity Account, the Termination Account and the Sinking Fund Reserve
Account in Permitted Investments that will mature on or before the next
succeeding Payment Date.
On the final maturity date for the Serial Mortgage Notes, after
all payments have been made in full to the holders of the Serial Mortgage
Notes, the Collateral Trustee will transfer any balance remaining in the
Initial Revenue Account to the Second Revenue Account.
(c) On each Payment Date after ________, 2005, the Collateral
Trustee shall withdraw funds first from the Sinking Fund Reserve Account (only
in the case of clause (iii)(B) below), then from the Second Revenue Account,
then from the Termination Account and then from the Equity Account, in each
case to the extent of the funds available therein, to pay:
(i) to deposit into the Operating Account the Recurring Fees
and Taxes then due and payable for each Vessel, or which will become
due and payable prior to the next succeeding Payment Date;
(ii) to pay all interest then due and payable on the Term
Mortgage Notes to the Holders of the Term Mortgage Notes, ratably in
the proportion that the amount of such payment then due under each
Term Mortgage Note bears to the aggregate amount of the payments then
due under all such Term Mortgage Notes;
(iii) (A) if such Payment Date is a sinking fund redemption date or
a date for the payment of principal on the Term Mortgage Notes, to
pay the aggregate sinking fund redemption amount or amount of
principal then due and payable on the Term Mortgage Notes, ratably,
in the case of payment due on maturity, in the proportion that the
amount of such payment then due under each such Term Mortgage Note
bears to the aggregate amount of the payment then due under all such
Term Mortgage Notes and (B) if such Payment Date is not a sinking
fund redemption date or a date for the payment of principal on the
Term Mortgage Notes, to deposit into the Sinking Fund Reserve Account
an amount, if any, equal to one-half of the aggregate sinking fund
redemption amount or amount of principal due and payable on the Term
Mortgage Notes on the next succeeding Payment Date;
(iv) to pay to the Indenture Trustee and the Collateral Trustee,
respectively, the fees and expenses then due and payable under the
Term Indenture to the Indenture Trustee and under the Collateral
Agreement to the Collateral Trustee;
(v) to deposit into the Operating Account, the Management Fee
and the Technical Advisor's Fee then due and payable for each Vessel;
and
(vi) if such Payment Date is an Equity Transfer Date, to the
extent funds are available, to deposit the Equity Remainder for each
Vessel into the Equity Account.
After the foregoing payments have been made, the Indenture Trustee will invest
(and reinvest, as applicable) any balance remaining in each of the Sinking
Fund Reserve Account, the Second Revenue Account, the Equity Account and the
Termination Account in Permitted Investments that will mature on or before the
next succeeding Payment Date. If so directed by California Petroleum and if
no Indenture Event of Default has occurred and is continuing, the Indenture
Trustee will purchase Term Mortgage Notes in the open market from funds, if
any, available in the Sinking Fund Reserve Account, provided that (a) the
purchase price of such Term Mortgage Notes is less than 100% of the principal
amount thereof plus accrued and unpaid interest to the date of such purchase
and (b) such Term Mortgage Notes are used to satisfy California Petroleum's
sinking fund obligations on the Term Mortgage Notes on the next succeeding
Payment Date.
(d) On each Payment Date occurring after the date on which
each Vessel either (i) has been sold, (ii) is subject to an Acceptable
Replacement Charter or (iii) is subject to an Initial Charter for which the
last optional termination date has occurred and has not been exercised, the
Collateral Trustee shall if so directed by the Manager disburse excess funds
contained in the Second Revenue Account and Termination Account to the Owners,
pro rata in proportion to the amount of such funds deposited in such Trust
Accounts in respect of such Owner's Vessel. For purposes of this Section
3.03(d), amounts contained in the Second Revenue Account and Termination
Account shall on any date of determination be deemed excess funds to the
extent, if any, that charterhire payments under all Initial Charters and
Acceptable Replacement Charters then in effect during the non-cancellable term
of such charters, after giving effect to (1) any "gross up" of such amounts as
a result of any withholding tax on such charterhire payments, (2) the amounts
then held in the Termination Account, (3) the amounts then held in the Second
Revenue Account and (4) all fees and expenses, if any, incurred but unpaid in
connection with the recharter of the Vessels, provide sufficient funds for the
payment in full when due of (A) sinking fund payments and payments of
principal and interest on the then Outstanding Term Mortgage Notes in
accordance with the revised schedule of sinking fund and principal payments
that is applicable on such date of determination, (B) the amount of Recurring
Fees and Taxes for all such Vessels, (C) the amount of Management Fees and
Technical Advisor's Fees for all such Vessels, (D) the amount of fees and
expenses of the Indenture Trustee and Collateral Trustee and (E) an amount at
least equal to 30% of the estimated amounts, on a per annum basis, referred to
in clauses (B), (C) and (D) above for miscellaneous or unexpected expenses.
Section 3.04 Application of Moneys in the Collateral
Account. The Collateral Trustee shall have the right (pursuant to Section
4.07) at any time to apply moneys held by it in the Collateral Account to the
payment of due and unpaid Trustee Fees and any moneys held by it in the
Termination Account pursuant to Section 3.01(g) to the payment of due and
unpaid Trustee Fees relating to the Term Mortgage Notes. Any moneys held by
the Collateral Trustee in the Collateral Account pursuant to clause (i) of the
first paragraph of Section 3.01(g) or the second paragraph of Section 3.01(g)
shall, to the extent available for distribution (it being understood that the
Collateral Trustee may liquidate Permitted Investments prior to maturity in
order to make a distribution pursuant to this Section 3.04), be distributed by
the Collateral Trustee on each Distribution Date in the following order of
priority:
First: to the Collateral Trustee for any due and unpaid Trustee
Fees and then to all reasonable expenses and charges, including the
expenses of any taking, attorney's fees, court costs and other
expenses or advances made or incurred by or on behalf of the
Collateral Trustee in connection with the ascertainment or protection
of its rights and the pursuance of its remedies hereunder or under
any of the Security Documents (including, without limitation, the
reasonable fees and disbursements of counsel);
Second: to the Indenture Trustees in an amount equal to the due
and unpaid interest on the Serial Mortgage Notes and Term Mortgage
Notes Outstanding for payment of such due and unpaid interest and, if
such money shall be insufficient to pay all such amounts in full,
then ratably to the applicable Indenture Trustees in proportion to
the due and unpaid amounts thereof on such Distribution Date;
Third: to the Indenture Trustees in an amount equal to the due
and unpaid principal on the Serial Mortgage Notes and Term Mortgage
Notes Outstanding for payment of such due and unpaid principal and,
if such money shall be insufficient to pay all such amounts in full,
then ratably to the applicable Indenture Trustees in proportion to
the due and unpaid amounts thereof on such Distribution Date;
Fourth: to each of the Indenture Trustees in an amount equal to
all other sums which constitute Secured Obligations then due and
payable and, if such moneys shall be insufficient to pay such sums
in full, then ratably to the Indenture Trustees in proportion to such
sums; and
Fifth: any surplus to the Owners or their successors or assigns
or to whomsoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction may direct.
Any moneys held by the Collateral Trustee in the Collateral
Account pursuant to clause (ii) of the first paragraph of Section 3.01(g)
shall be applied by the Collateral Trustee to the purposes for which they were
paid or held pursuant to the applicable provisions of the Security Documents.
In the case of an Event of Default under the Term Indenture,
any moneys held by the Collateral Trustee in the Termination Account shall be
applied by the Collateral Trustee as set forth above in subparagraphs First
through Fourth (with any excess deposited into the Termination Account),
provided that no such funds shall be paid to the Serial Indenture Trustee for
its benefit or for the benefit of holders of the Serial Mortgage Notes.
Section 3.05 Collateral Trustee's Calculations. In making
the determinations and allocations required by this Article Three, the
Collateral Trustee may rely upon information supplied by the Indenture
Trustees as to amounts payable with respect to Secured Obligations arising
under or with respect to the Indentures or the Notes issued thereunder, and
the Collateral Trustee shall have no liability to California Petroleum or any
of the Secured Parties for actions taken in reliance on such information. All
distributions made by the Collateral Trustee pursuant to this Article Three
shall (subject to any decree of any court of competent jurisdiction) be final,
and the Collateral Trustee shall have no duty to inquire as to the application
of any amounts so distributed. However, if at any time the Collateral Trustee
determines that an allocation or distribution previously made pursuant to this
Article Three was based on a mistake of fact, the Collateral Trustee may in
its discretion, but shall not be obligated to, adjust subsequent allocations
and distributions thereunder so that, on a cumulative basis, the Secured
Parties receive the distributions to which they would have been entitled if
such mistake of fact had not been made.
ARTICLE FOUR
AGREEMENTS WITH COLLATERAL TRUSTEE
The Indenture Trustees and California Petroleum agree as follows:
Section 4.01 Delivery of Secured Instruments and Security
Documents. California Petroleum shall deliver to the Collateral Trustee true
and complete copies of all Secured Instruments in effect as of the date this
Collateral Agreement shall become effective, and shall deliver to the
Collateral Trustee, promptly upon the execution thereof, a true and complete
copy of each Secured Instrument and all amendments, modifications or
supplements to any Secured Instrument entered into after such time. California
Petroleum shall deliver to the Collateral Trustee the counterpart of each
Security Document marked "Secured Party's Original".
Section 4.02 Information as to Loan Agreements and
Indenture Trustees. The Indenture Trustees shall deliver to the Collateral
Trustee, on the date this Collateral Agreement becomes effective and from time
to time upon request of the Collateral Trustee, a list setting forth as of a
date not more than 30 days prior to the date of such delivery, the aggregate
unpaid principal amount of the Serial Loans and the Term Loan for each Owner
under the related Loan Agreements and the name and address of the Indenture
Trustees. In addition, each Indenture Trustee shall promptly notify the
Collateral Trustee of any change in the identity of such Indenture Trustee.
Section 4.03 Representations and Warranties; Further
Assurances. Whether or not an Enforcement Notice is then in effect,
California Petroleum will, from time to time, execute, deliver, file and
record any statement, assignment, instrument, document, mortgage, agreement or
other paper and take any other action, (including, without limitation, any
filings of financing or continuation statements under the UCC) that from time
to time may be necessary or desirable, or that the Collateral Trustee, any
Indenture Trustee or the Majority Noteholders may request, in order to create,
preserve, perfect, confirm or validate the Security Interests or to enable the
Collateral Trustee and the Secured Parties to obtain the full benefits of this
Agreement, or to enable the Collateral Trustee to exercise and enforce any of
its rights, powers and remedies hereunder with respect to any of the
Collateral. The Collateral Trustee shall be entitled to withdraw from the
Operating Account amounts sufficient to pay the costs of, or incidental to,
any recording or filing of any financing or continuation statement,
assignment, instrument, document, mortgage, agreement or other paper
concerning the Collateral. If at any time California Petroleum shall refuse
to sign promptly any financing or continuation statement, California Petroleum
also hereby authorizes the Collateral Trustee to sign and to file such
financing or continuation statement without the signature of California
Petroleum to the extent permitted by applicable law. California Petroleum
agrees that a photographic, photostatic or other reproduction of any Security
Document or any Mortgage or of a financing statement is sufficient as a
financing statement.
Section 4.04 Other Agreements of California Petroleum.
(a) California Petroleum will not change (A) the location of its chief
executive office or chief place of business, (B) the counties where it keeps
or holds any Collateral in its possession at any time or any records relating
to the Collateral or (C) the number of counties in the Commonwealth of
Massachusetts in which it has a place of business unless, in each case, it
shall have given the Collateral Trustee prior notice thereof and (at its own
cost and expense) delivered an opinion of counsel with respect thereto prior
to taking such action in customary form confirming the continued validity and
perfection under the UCC (to the extent such Security Interests may be
perfected under the UCC) of the Security Interests granted hereby (which
opinion may contain such exceptions and assumptions as are customary in a
legal opinion of such type). California Petroleum shall not in any event
change the location of any Collateral in its possession at any time if such
change would cause the Security Interests in such Collateral to lapse or cease
to be perfected unless prior to taking such action it shall have taken such
actions as may be necessary to prevent such lapse in perfection or failure to
be perfected.
(b) California Petroleum will not dispose of any Collateral
in its possession at any time or create, incur or suffer to exist any Lien
with respect to any Collateral.
(c) California Petroleum will, promptly upon request, provide to
the Collateral Trustee all information and evidence it may reasonably request
concerning the Collateral to enable the Collateral Trustee to enforce the
provisions of this Collateral Agreement.
(d) California Petroleum will at all times do nothing to impair the
rights of the Collateral Trustee and the Secured Parties in and to the
Collateral.
(e) California Petroleum will permit the Collateral Trustee, the
Indenture Trustees or any agent designated by any of them, from time to time
during normal business hours, to inspect, audit, check and make abstracts from
California Petroleum's books, records and other papers relating to the
Collateral.
(f) If any Collateral is at any time in the possession or control
of any warehouseman, bailee or any agent or processor of California Petroleum,
California Petroleum shall notify such warehouseman, bailee, agent or
processor of the Security Interest created under the Security Documents and to
hold all such Collateral for the account of the Collateral Trustee subject to
the instructions of the Collateral Trustee.
(g) Except as otherwise provided herein, California Petroleum
will not amend any Security Document without the prior written consent of the
Collateral Trustee as instructed by the Indenture Trustees or the Applicable
Secured Parties.
ARTICLE FIVE
RELEASES; NON-DISTURBANCE
Section 5.01 Releases. (a) In connection with the
termination of the Liens created by the Security Documents in whole or in part
or in connection with any disposition of Collateral permitted hereby or by any
Security Document, the Collateral Trustee will at the request of California
Petroleum as promptly as practicable release from the Lien created by the
Security Documents (x) all the Collateral (in connection with a termination of
all of the Security Interests) or (y) the relevant Collateral and deliver such
Collateral that is in its possession to California Petroleum and execute and
deliver such documents, certificates or other instruments as California
Petroleum shall reasonably request to evidence the termination of the Security
Interests or the release of such Collateral, as the case may be. Any such
request shall be in writing signed by an Authorized Financial Officer of
California Petroleum, shall describe the property to be released in reasonable
detail, and shall state that such release is or will be in accordance with the
Secured Instruments and the Security Documents. Each release instrument to be
delivered pursuant to any provision of this Collateral Agreement shall be in
such form as is reasonably requested by California Petroleum and, where
appropriate, shall be in recordable form or, in the case of UCC Termination
Statements, in the statutorily-prescribed form.
Section 5.02 Non-Disturbance. So long as no Charter Event
of Default shall have occurred and be continuing under any Initial Charter,
Acceptable Replacement Charter or other charter, the Security Interest of the
Collateral Trustee in such Initial Charter, Acceptable Replacement Charter or
other charter and the related Vessel created hereby shall be subject to the
rights, if any, of Chevron Transport under such Initial Charter or the
charterer under such Acceptable Replacement Charter or other charter, as the
case may be.
ARTICLE SIX
THE COLLATERAL TRUSTEE
Section 6.01 Acceptance of Trust. The Collateral Trustee,
for itself and its successors, hereby accepts the trust created by this
Collateral Agreement upon the terms and conditions hereof.
Section 6.02 Exculpatory Provisions. (a) The Collateral
Trustee shall not be responsible in any manner whatsoever for the correctness
of any recitals, statements, representations or warranties, except its own, in
the Security Documents. The Collateral Trustee makes no representations as to
the value or condition of the Trust Estate or any part thereof, or as to the
title of California Petroleum or any Owner thereto or as to the security
afforded by any Security Document, or as to the validity, execution (except
its own execution), enforceability, legality or sufficiency of any of the
Security Documents or the Secured Obligations, and the Collateral Trustee shall
incur no liability or responsibility in respect of any such matters. The
Collateral Trustee shall not be responsible for insuring the Collateral or for
the payment of taxes, charges or assessments or discharging of liens upon the
Collateral or otherwise as to the maintenance of the Collateral, except that
if the Collateral Trustee takes possession of any Collateral, the Collateral
Trustee shall use reasonable care in the preservation of the Collateral in its
possession.
(b) The Collateral Trustee shall not be required to ascertain or
inquire as to the performance by California Petroleum or any Owner of any of
the covenants or agreements contained in any Security Document or Secured
Instrument. Whenever it is necessary, or in the opinion of the Collateral
Trustee advisable, for the Collateral Trustee to ascertain the amount of
Secured Obligations then held by Secured Parties, the Collateral Trustee may
rely on certificates of the Serial Indenture Trustee or the Term Indenture
Trustee, as the case may be, with respect to Secured Obligations arising under
or with respect to the Serial Indenture and the Term Indenture, respectively,
and the Notes issued thereunder.
(c) The Collateral Trustee shall be under no obligation or duty to
take any action under any Security Document if taking such action (i)(A) would
subject the Collateral Trustee to a tax in any jurisdiction where it is not
then subject to a tax or (B) would require the Collateral Trustee to qualify
to do business in any jurisdiction where it is not then so qualified, unless in
either case the Collateral Trustee receives security or indemnity satisfactory
to it against such tax (or equivalent liability), or any liability resulting
from such qualification, in each case as results from the taking of such
action under this Collateral Agreement or any Security Document or (ii) would
subject the Collateral Trustee to in personam jurisdiction in any location
where it is not then so subject.
(d) Notwithstanding any other provision of this Collateral
Agreement or any other Security Document, the Collateral Trustee, in its
individual capacity, shall not be personally liable for any action taken or
omitted to be taken by it in accordance with the Security Documents except for
its own negligence or bad faith.
(e) The Collateral Trustee shall have the same rights with respect
to any Secured Obligation held by it as any other Secured Party and may
exercise such rights as though it were not the Collateral Trustee hereunder,
and may accept deposits from, lend money to, and generally engage in any kind
of banking or trust business with California Petroleum, any Owner, Chevron
Transport or Chevron, as if it were not the Collateral Trustee.
Section 6.03 Delegation of Duties. The Collateral Trustee
may execute any of the trusts or powers hereof and perform any duty hereunder
either directly or by or though agents or attorneys-in-fact. The Collateral
Trustee shall be entitled to advice of counsel and other experts concerning
all matters pertaining to such trusts, powers and duties. The Collateral
Trustee shall not be responsible for the negligence or misconduct of any agents
or attorneys-in-fact selected by them in good faith without negligence.
Section 6.04 Reliance by Collateral Trustee. (a)
Whenever in the administration of the Security Documents the Collateral
Trustee shall deem it necessary or desirable that a factual matter be proved
or established in connection with the Collateral Trustee taking, suffering or
omitting any actions, such matter (unless other evidence in respect thereof is
herein specifically prescribed) may be deemed to be conclusively proved or
established by a certificate of an Authorized Financial Officer of California
Petroleum delivered to the Collateral Trustee, and such certificate shall be
full warrant to the Collateral Trustee for any action taken, suffered or
omitted in reliance thereon, subject, however, to the provisions of Section
6.05.
(b) The Collateral Trustee may consult with counsel and other
experts, and any opinion of counsel or written opinion from such other expert
shall be full and complete authorization and protection in respect of any
action taken or suffered by it under any Security Document in accordance
therewith. The Collateral Trustee shall have the right at any time to seek
instructions concerning the administration of the Security Documents from any
court of competent jurisdiction.
(c) The Collateral Trustee may rely, and shall be fully protected
in acting, upon any resolution, statement, certificate, instrument, opinion,
report, notice, request, consent, order, bond or other paper or document which
it has no reason to believe to be other than genuine and to have been signed
or presented by the proper party or parties or, in the case of cables,
facsimile transmissions and telexes, to have been sent by the proper party or
parties. In the absence of negligence or bad faith, the Collateral Trustee
may conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon any certificates or opinions furnished
to the Collateral Trustee and conforming to the requirements of any Security
Document.
(d) The Collateral Trustee shall not be under any obligation to
exercise any of the rights or powers vested in the Collateral Trustee by this
Collateral Agreement (including, without limitation, Article Three) and the
other Security Documents, at the request or direction of the Indenture
Trustees or the Majority Noteholders pursuant to this Collateral Agreement or
otherwise, unless the Collateral Trustee shall have been provided adequate
security and indemnity against the costs, expenses and liabilities which may
be incurred by it in connection therewith, including such reasonable advances
as may be requested by the Collateral Trustee.
(e) Upon any application or demand by an Owner (except any such
application or demand which is expressly permitted to be made orally) to the
Collateral Trustee to take or permit any action under any of the provisions of
any Security Document, such Owner shall furnish to the Collateral Trustee a
certificate of an Authorized Financial Officer of such Owner stating that all
conditions precedent, if any, provided for in any relevant Security Document or
any Secured Instrument relating to the proposed action have been complied
with, and in the case of any such application or demand as to which the
furnishing of any document is specifically required by any provision of a
Security Document relating to such particular application or demand, such
additional document shall also be furnished.
(f) Any opinion of counsel may be based, insofar as it relates to
factual matters, upon a certificate of an appropriate Authorized Financial
Officer or representations made by an appropriate Authorized Financial Officer
in a writing delivered to the Collateral Trustee.
(g) In any case in which the Collateral Trustee shall be required
or permitted to determine whether any proceeds or avails of the sale or other
disposition of any property shall be allocated to the Collateral Account or
another Trust Account, or otherwise to make any determination as to the extent
to which the Lien created by any Security Document secures any Secured
Obligations, the Collateral Trustee is authorized, at the cost and expense of
the Trust Estate and without any direction from, or requirements for consent
of or authorization by, the Indenture Trustees or the Applicable Secured
Parties, to institute proceedings in a court of competent jurisdiction for the
obtaining of any authoritative determination of such matter. If the
Collateral Trustee institutes any such proceeding, it shall give prompt
written notice thereof to California Petroleum and the Indenture Trustees and
shall afford each of them opportunity to participate in such proceeding.
Section 6.05 Limitations on Duties of Collateral Trustee.
(a) Unless an Enforcement Notice is in effect, the Collateral Trustee shall
be obligated to perform such duties and only such duties as are specifically
set forth in the Security Documents, and no implied covenants or obligations
shall be read into any Security Document against the Collateral Trustee. If
and so long as an Enforcement Notice is in effect, the Collateral Trustee
shall, subject to the provisions of subsection 2.04(b), exercise the rights
and powers vested in it by the Security Documents, and shall not be liable
with respect to any action taken by it, or omitted to be taken by it, in
accordance with the direction of the Indenture Trustees.
(b) Except as herein otherwise expressly provided, the Collateral
Trustee shall not be under any obligation to take any action which is
discretionary with the Collateral Trustee under the provisions of any Security
Document except upon the written request of the Applicable Secured Parties.
The Collateral Trustee shall make available for inspection and copying by any
Indenture Trustee each certificate or other paper furnished to the Collateral
Trustee by California Petroleum under or in respect of any Security Document
or any of the Collateral.
(c) No provision of any Security Document shall be deemed to impose
any duty or obligation on the Collateral Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in
any jurisdiction in which it shall be illegal, or in which the Collateral
Trustee shall be unqualified or incompetent, to perform any such act or acts
or to exercise any such right, power, duty or obligation or if such
performance or exercise would constitute doing business by the Collateral
Trustee in such jurisdiction or imposes a tax on the Collateral Trustee by
reason thereof.
Section 6.06 Moneys To Be Held in Trust. All moneys
received by the Collateral Trustee under or pursuant to any provision of any
Security Document (except Trustee Fees) shall be held in trust for the
purposes for which they were paid or are held.
Section 6.07 Resignation and Removal of the Collateral
Trustee. (a) The Collateral Trustee may at any time, by giving written notice
to California Petroleum, the Owners, the Manager and the Indenture Trustees,
resign and be discharged of the responsibilities hereby created, such
resignation to become effective upon (i) the appointment of a successor
Collateral Trustee by California Petroleum, at the direction of the Manager,
(if no Enforcement Notice is then in effect) or the Applicable Secured Parties
(if an Enforcement Notice is then in effect), (ii) the acceptance of such
appointment by such successor Collateral Trustee and (iii) if no Enforcement
Notice is then in effect, the approval of such successor Collateral Trustee
evidenced by one or more instruments signed by the Indenture Trustees, which
approval shall not unreasonably be withheld. If no successor Collateral
Trustee shall be appointed and shall have accepted such appointment within 60
days after the Collateral Trustee gives the aforesaid notice of resignation,
the resigning Collateral Trustee or any Indenture Trustee may apply to any
court of competent jurisdiction to appoint a successor Collateral Trustee to
act until such time, if any, as a successor Collateral Trustee shall have been
appointed as provided in this Section 6.07. Any successor so appointed by
such court shall immediately and without further act be superseded by any
successor Collateral Trustee appointed as provided in this Section 6.07.
California Petroleum, at the direction of the Owners, (if no Enforcement
Notice is then in effect) or the Applicable Secured Parties (if an Enforcement
Notice is then in effect) may, at any time upon giving 10 days' prior written
notice thereof to the Indenture Trustees, remove the Collateral Trustee and
California Petroleum, at the direction of the Owners, (if no Enforcement
Notice is then in effect but subject to the approval referred to in clause
(iii) of the first sentence hereof) or the Applicable Secured Parties (if an
Enforcement Notice is then in effect) may appoint a successor Collateral
Trustee such removal to be effective upon the acceptance of such appointment
by the successor. Any Collateral Trustee shall be entitled to Trustee Fees to
the extent incurred or arising, or relating to events occurring, before or in
connection with such resignation or removal.
(b) If at any time the Collateral Trustee shall resign or be
removed, whether pursuant to subsection 6.07(a) or otherwise, or otherwise
become incapable of acting, the powers, duties, authority and title of the
predecessor Collateral Trustee shall be terminated and cancelled without any
other formality (except as may be required by applicable law) other than the
appointment and designation of a successor pursuant to subsection 6.07(a) and
delivery, by the Person or Persons who shall have appointed or procured the
appointment of such successor, of notice thereof, duly acknowledged by such
successor, to the predecessor, California Petroleum, the Owners, the Manager
and the Indenture Trustees. Such notice of appointment and designation shall
be full evidence of the right and authority to make the same and of all the
facts therein recited, and the Security Documents shall vest in such
successor, without any further act, deed or conveyance, all the estates,
properties, rights, powers, trusts, duties, authority and title of its
predecessor; but such predecessor shall, nevertheless, on the written request
of the Applicable Secured Parties, the Indenture Trustees, California
Petroleum, the Manager, the Owners or the successor, and at the expense of
California Petroleum, execute and deliver an instrument transferring to such
successor all the estates, properties, rights, powers, trusts, duties,
authority and title of such predecessor under the Security Documents and shall
deliver all Collateral held by it or him or its or his agents to such
successor. Should any mortgage, conveyance or other instrument in writing
from California Petroleum be required by any successor Collateral Trustee for
more fully and certainly vesting in such successor the estates, properties,
rights, powers, trusts, duties, authority and title vested or intended to be
vested in the predecessor Collateral Trustee any and all such mortgages,
conveyances and other instruments in writing shall, on request of such
successor, be executed, acknowledged and delivered by California Petroleum.
If California Petroleum shall not have executed and delivered any such
mortgage, conveyance or other instrument within 10 days after it received a
written request from the successor Collateral Trustee to do so, or if an
Enforcement Notice is in effect, the predecessor Collateral Trustee may
execute the same on behalf of California Petroleum. California Petroleum
hereby appoints any predecessor Collateral Trustee as its agent and attorney
to act for it as provided in the next preceding sentence.
Section 6.08 Status of Successor Collateral Trustee.
Every successor Collateral Trustee appointed pursuant to Section 6.07 shall be
a bank or trust company in good standing and having power to act as Collateral
Trustee hereunder, incorporated under the laws of the United States of America
or any State thereof or the District of Columbia and having its principal
corporate trust office within the 48 contiguous States and shall also have
capital, surplus and undivided profits of not less than $10,000,000, if there
be such an institution with such capital, surplus and undivided profits
willing, qualified and able to accept the trust hereunder upon reasonable or
customary terms.
Section 6.09 Merger of the Collateral Trustee. Any
corporation into which the Collateral Trustee may be merged, or with which it
may be consolidated, or any corporation resulting from any merger or
consolidation to which the Collateral Trustee shall be a party, shall be
Collateral Trustee under the Security Documents without the execution or
filing of any paper or any further act on the part of the parties hereto.
Section 6.10 Co-Trustee; Separate Trustee. (a) If at any
time or times it shall be necessary or prudent in order to conform to any law
of any jurisdiction in which any of the Collateral shall be located, or to
avoid any violation of law or imposition on the Collateral Trustee of taxes by
such jurisdiction not otherwise imposed on the Collateral Trustee, or the
Collateral Trustee shall be advised by counsel, satisfactory to it, that it is
necessary or prudent in the interest of the Secured Parties, or the Majority
Noteholders or the Indenture Trustees shall in writing so request, or the
Collateral Trustee shall deem it desirable for its own protection in the
performance of its duties under any Security Document, the Collateral Trustee,
the Indenture Trustees and California Petroleum as shall be necessary or
prudent shall execute and deliver all instruments and agreements necessary or
proper to constitute another bank or trust company, or one or more persons
approved by the Collateral Trustee and California Petroleum, either to act as
co-trustee or co-trustees of all or any of the Collateral under any of the
Security Documents, jointly with the Collateral Trustee originally named
herein or therein or any successor Collateral Trustee, or to act as separate
trustee or trustees of any of the Collateral. If California Petroleum shall
not have joined in the execution of such instruments and agreements within 10
days after it receives a written request from the Collateral Trustee to do so,
or if an Enforcement Notice is in effect, the Collateral Trustee may act under
the foregoing provisions of this subsection 6.10(a) without the concurrence of
California Petroleum and execute and deliver such instruments and agreements
on behalf of California Petroleum. California Petroleum hereby appoints the
Collateral Trustee as its agent and attorney to act for it under the foregoing
provisions of this subsection 6.10(a) in either of such contingencies.
(b) Every separate trustee and every co-trustee, other than any
successor Collateral Trustee appointed pursuant to Section 6.07, shall, to the
extent permitted by law, be appointed and act and be such, subject to the
following provisions and conditions:
(i) all rights, powers, duties and obligations conferred upon
the Collateral Trustee in respect of the custody, control and
management of moneys, papers or securities shall be exercised solely
by the Collateral Trustee or any agent appointed by the Collateral
Trustee;
(ii) all rights, powers, duties and obligations conferred or
imposed upon the Collateral Trustee under the relevant Security
Document or Documents shall be conferred or imposed and exercised or
performed by the Collateral Trustee and such separate trustee or
separate trustees or co-trustee or co-trustees, jointly, as shall be
provided in the instrument appointing such separate trustee or
separate trustees or co-trustee or co-trustees, except to the extent
that under any law of any jurisdiction in which any particular act or
acts are to be performed the Collateral Trustee shall be incompetent
or unqualified to perform such act or acts, or unless the performance
of such act or acts would result in the imposition of any tax on the
Collateral Trustee which would not be imposed absent such joint act
or acts, in which event such rights, powers, duties and obligations
shall be exercised and performed by such separate trustee or separate
trustees or co-trustee or co-trustees;
(iii) no power given by any Security Document to, or which it is
provided herein or therein may be exercised by, any such co-trustee or
co-trustees or separate trustee or separate trustees, shall be
exercised hereunder or thereunder by such co-trustee or co-trustees or
separate trustee or separate trustees except jointly with, or with
the consent in writing of, the Collateral Trustee, anything contained
in any Security Document to the contrary notwithstanding;
(iv) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(v) California Petroleum and the Collateral Trustee, at any
time by an instrument in writing executed by them jointly, may accept
the resignation of or remove any such separate trustee or co-trustee
and, in that case by an instrument in writing executed by them
jointly, may appoint a successor to such separate trustee or
co-trustee, as the case may be, anything contained herein to the
contrary notwithstanding. If California Petroleum shall not have
joined in the execution of any such instrument within 10 days after it
receives a written request from the Collateral Trustee to do so, or
if an Enforcement Notice is in effect, the Collateral Trustee shall
have the power to accept the resignation of or remove any such
separate trustee or co-trustee and to appoint a successor without the
concurrence of California Petroleum, California Petroleum hereby
appointing the Collateral Trustee its agent and attorney to act for
them in such connection in such contingency. If the Collateral
Trustee shall have appointed a separate trustee or separate trustees
or co-trustee or co-trustees as above provided, the Collateral
Trustee may at any time, by an instrument in writing, accept the
resignation of or remove any such separate trustee or co-trustee and
the successor to any such separate trustee or co-trustee shall be
appointed by California Petroleum and the Collateral Trustee, or by
the Collateral Trustee alone pursuant to this subsection 6.10(b).
Section 6.11 Treatment of Payee or Indorsee by Collateral
Trustee; Representatives of Secured Parties. (a) The Collateral Trustee may
treat the registered holder or, if none, the payee or indorsee of any
promissory note or bond evidencing a Secured Obligation as the absolute owner
thereof for all purposes and shall not be affected by any notice to the
contrary, whether such promissory note or bond shall be past due or not.
(b) Any Person (other than the Indenture Trustees) which shall be
designated as the duly authorized representative of one or more Secured
Parties to act as such in connection with any matters pertaining to this
Collateral Agreement or the Collateral shall present to the Collateral Trustee
such documents, including, without limitation, opinions of counsel, as the
Collateral Trustee may reasonably require, in order to demonstrate to the
Collateral Trustee the authority of such Person to act as the representative
of such Secured Parties.
ARTICLE SEVEN
MISCELLANEOUS
Section 7.01 Notices. Unless otherwise specified herein,
all notices, requests, demands or other communications given to California
Petroleum, the Collateral Trustee or either Indenture Trustee shall be given in
writing or by telex or facsimile transmission (i) if to California Petroleum
or the Collateral Trustee, to such party at its address or telex or facsimile
transmission number specified on the signature pages hereof or any other
address or telex or facsimile transmission number which such party shall have
specified as its address or telex or facsimile transmission number for the
purpose of communications hereunder, by notice given in accordance with this
Section 7.01 to the party sending such communication, (ii) if to either of the
Indenture Trustees, to it at its address specified in or pursuant to the
relevant Indenture or specified from time to time by written notice to the
Collateral Trustee, (iii) if to any Owner, to it at its address specified in
or pursuant to [_________] and (iv) if to the Manager, to it at its address
specified in or pursuant to the Management Agreement. Each such notice,
request or other communication shall be effective (a) if given by telex, when
such telex is transmitted to the number specified in or pursuant to this
Section and the appropriate answerback is received, (b) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, registered or certified mail, return receipt requested,
addressed as aforesaid, (c) if given by facsimile transmission, when such
facsimile is transmitted to the facsimile transmission number specified in or
pursuant to this Section and telephonic confirmation of receipt thereof is
received or (d) if given by any other means, when received at the address
specified in or pursuant to this Section 7.01; provided that any notice,
request or demand to the Collateral Trustee shall not be effective until
received by the Collateral Trustee at the office designated by it pursuant to
this Section 7.01.
Section 7.02 No Waivers. No failure on the part of the
Collateral Trustee, any co-trustee, any separate trustee, either Indenture
Trustee or any Secured Party to exercise, no course of dealing with respect
to, and no delay in exercising, any right, power or privilege under any
Security Document shall operate as a waiver thereof nor shall any single or
partial exercise of any such right, power or privilege preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege.
Section 7.03 Amendments, Supplements and Waivers. (a)
With the written consent of the Indenture Trustees, the Collateral Trustee and
California Petroleum may, from time to time, enter into written agreements
supplemental hereto for the purpose of curing any ambiguity or correcting or
supplementing any provision contained herein or in any Security Document which
may be defective or inconsistent with any other provision contained herein or
therein; or making such other provisions in regard to matters or questions
arising under this Collateral Agreement or under any Security Document as they
may deem necessary or desirable and which shall not adversely affect the
interests of the Secured Parties;
(b) With the written consent of the Indenture Trustees, the
Collateral Trustee and California Petroleum may, from time to time, enter into
written agreements supplemental hereto for the purpose of adding to or waiving
any provision of this Collateral Agreement or changing in any manner the
rights of the Collateral Trustee, the Secured Parties or California Petroleum
hereunder; provided that no such supplemental agreement shall unless signed or
consented to by the Majority Noteholders:
(i) amend, modify or waive any provision of this Section 7.03;
(ii) change the definition of "Applicable Secured Parties,"
"Outstanding," "Majority Noteholders", "Majority Serial Noteholders,"
"Majority Term Noteholders" or "Secured Obligations" or the number or
percentage of Secured Parties required to take any action under any
Security Document;
(iii) amend, modify or waive any provision of Section 3.01, 3.02,
3.03 or 3.04 of this Collateral Agreement or change the definition of
any defined term used in any of such Sections; or
(iv) except as otherwise specifically provided herein, agree to
the release of all or substantially all of the Collateral.
Any such supplemental agreement shall be binding upon California
Petroleum, the Indenture Trustees, the Secured Parties and the Collateral
Trustee and their respective successors. The Collateral Trustee shall not
enter into any such supplemental agreement unless it shall have received a
certificate of an Authorized Financial Officer of California Petroleum and an
opinion of counsel to the effect that such supplemental agreement will not
result in a breach of any provision or covenant contained in any of the
Secured Instruments.
(c) Amendments of Other Security Documents. The Indenture
Trustees (so long as no Enforcement Notice shall be in effect) or the
Applicable Secured Parties (so long as an Enforcement Notice shall be in
effect) shall have the exclusive authority to direct the Collateral Trustee to
amend, supplement or waive any provision of any Security Document (other than
this Collateral Agreement), without any consent or approval of, or prior
notice to, any other Secured Party; provided, however, that no such amendment,
supplement or waiver shall affect the right of any Secured Party not
consenting thereto to equal and ratable security with respect to Collateral to
the extent and for the periods contemplated by this Collateral Agreement or
effect a release of Collateral which would otherwise not be permitted under
the provisions of this Collateral Agreement.
(d) Nothing in this Section 7.03 shall limit or impair the
rights of California Petroleum set forth in Article V.
Section 7.04 Headings. The table of contents and the
headings of Sections and subsections have been included herein for convenience
only and should not be considered in interpreting any of the Security
Documents.
Section 7.05 Severability. Any provision of this
Collateral Agreement which is prohibited or unenforceable in any jurisdiction
shall, to the fullest extent permitted by law, not invalidate the remaining
provisions hereof, and any such prohibition or unenforceability of any
provision in any jurisdiction shall not affect the enforceability of such
provision in any other jurisdiction.
Section 7.06 Successors and Assigns. This Collateral
Agreement shall be binding upon each of the parties hereto and shall inure to
the benefit of each of the parties hereto and each of the Secured Parties and
their respective successors and assigns, and nothing herein is intended or
shall be construed to give any other Person any right, remedy or claim under,
to or in respect of this Collateral Agreement or any Collateral.
Section 7.07 Governing Law. THE PROVISIONS OF THIS
COLLATERAL AGREEMENT CREATING A TRUST FOR THE BENEFIT OF THE HOLDERS OF THE
SECURED OBLIGATIONS AND SETTING FORTH THE RIGHTS, DUTIES, OBLIGATIONS AND
RESPONSIBILITIES OF THE COLLATERAL TRUSTEE HEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT AS
OTHERWISE REQUIRED BY MANDATORY PROVISIONS OF LAW.
Section 7.08 Counterparts. This Collateral Agreement may
be signed in any number of counterparts with the same effect as if the
signatures thereto and hereto were upon the same instrument.
Section 7.09 Termination. (a) Upon (i) receipt by the
Collateral Trustee from each Indenture Trustee of a written notice stating
that all of the Secured Obligations arising under or in connection with the
Indentures and the Notes issued thereunder have been paid or deemed paid in
full (which notice shall be signed by each Indenture Trustee promptly
following the payments contemplated in this clause (i)) and (ii) the payment
in full of all amounts payable to the Collateral Trustee hereunder (exclusive
of any contingent or unliquidated claims for indemnification or
reimbursement), the Liens created by the Security Documents shall terminate
forthwith and all right, title and interest of the Collateral Trustee in and
to the Trust Estate and the Collateral shall revert and be released to
California Petroleum, its successors and assigns.
(b) Upon the termination of the Collateral Trustee's security
interests and the release of the Collateral in accordance with subsection
7.09(a), the Collateral Trustee will promptly at California Petroleum's
written request, (i) execute and deliver to California Petroleum such
documents as California Petroleum shall reasonably request to evidence the
termination of such security interest or the release of the Collateral and (ii)
deliver or cause to be delivered to California Petroleum all property of
California Petroleum then held by the Collateral Trustee or any agent thereof.
(c) This Collateral Agreement shall terminate when the security
interests granted under the Security Documents have terminated and the
Collateral has been released.
(d) Nothing herein shall be construed to prevent the Collateral
Trustee from releasing Collateral in accordance with the terms of any
applicable Security Document.
(e) Anything in this Collateral Agreement to the contrary
notwithstanding, the trust created hereunder shall expire not later than the
expiration of 21 years after the death of the last to survive of all
descendants of Mario Cuomo, Governor of New York State, living on the date
hereof.
Section 7.10 No Liability to Other Secured Parties. None
of the Secured Parties shall incur any liability to any other Secured Party
with respect to any decision or determination permitted or required to be taken
or made by it in its capacity as a Secured Party hereunder and the existence
or exercise of any right by the Majority Noteholders or the Applicable Secured
Parties to take any action or make any determination hereunder shall not impose
on any Secured Party taking or failing to take any such action or exercise
such right any duty or liability to any other Secured Party with respect
thereto or to any of the Collateral affected thereby.
Section 7.11 Immunities of Incorporators, Officers,
Directors and Stockholders of California Petroleum. No recourse under or
upon any obligation, covenant or agreement contained in this Collateral
Agreement, or in the Indentures, or in any Note, or under any judgment
obtained against California Petroleum, or by the enforcement of any assessment
or by any legal or equitable proceeding by virtue of any constitution or
statute or otherwise or under any circumstances, under or independent of this
Collateral Agreement, shall be had against (i) any incorporator, officer,
director or stockholder, past, present or future, of California Petroleum, or
of any successor corporation, or (ii) any trustee, parent, affiliate, officer,
director or stockholder, past, present or future, of any stockholder of
California Petroleum, either directly or through California Petroleum, or
otherwise, and any and all personal liability of every name and nature whether
at law or in equity, or by constitution or by statute or otherwise, of any such
incorporator, officer, director or stockholder to respond by reason of the
non-payment of any stock or any act of omission or commission on his part or
otherwise, for the payment for or to the holder of any Secured Obligation or
otherwise, of any sum that may remain due and unpaid upon any Secured
Obligation, is hereby expressly waived and released as a condition of and
consideration for the execution of this Collateral Agreement.
7.12 Designated Representative. For purposes of this
Collateral Agreement, all notices, requests, demands or other communications
to be given by California Petroleum hereunder may be given by California
Petroleum's designated representative. Notice of the appointment of any such
designated representative shall be given to the Collateral Trustee and shall
be in writing signed by California Petroleum and acknowledged by such
designated representative. The parties hereto shall be entitled to rely upon
any such notices, requests, demands and other communications given by the
designated representative as though the same had been given by California
Petroleum.
IN WITNESS WHEREOF, the parties hereto have caused this Collateral
Agreement to be duly executed (by their respective authorized officers in the
case of corporate parties) as of the day and year first written above.
CALIFORNIA PETROLEUM
TRANSPORT CORPORATION
By _________________________
Title:
CHEMICAL TRUST COMPANY OF
CALIFORNIA, as Collateral
Trustee
By __________________________
Title:
CHEMICAL TRUST COMPANY
OF CALIFORNIA, as Serial
Indenture Trustee
By __________________________
Title:
CHEMICAL TRUST COMPANY
OF CALIFORNIA, as
Term Indenture Trustee
By __________________________
Title:
______________________________________________________________________________
______________________________________________________________________________
EXHIBIT 4.15
California Petroleum Transport Corporation
and
CalPetro Tankers (Bahamas I) Limited
___________________________________
ISSUE OF ONE DEBENTURE
Dated ________ __, 1994
___________________________________
______________________________________________________________________________
______________________________________________________________________________
Table of Contents
Page No.
ARTICLE I
DEFINITIONS................................ 1
ARTICLE II
COVENANT TO PAY............................... 1
Section 2.1. Covenant to Pay......................................... 1
ARTICLE III
MORTGAGE, CHARGE AND ASSIGNMENT....................... 2
Section 3.1. Charge.................................................. 2
Section 3.2. Legal Securities........................................ 3
Section 3.3. Conversion of Floating Charge........................... 3
Section 3.4. Negative Pledge......................................... 3
Section 3.5. New Accounts............................................ 3
ARTICLE IV
PRESERVATION OF SECURITY........................... 3
Section 4.1. Continuing Security..................................... 3
Section 4.2. Waiver of Defenses...................................... 4
Section 4.3. Immediate Recourse...................................... 4
Section 4.4. Preservation of Rights.................................. 4
Section 4.5. Additional Security..................................... 5
Section 4.6. Certificate............................................. 5
Section 4.7. Discharge............................................... 5
Section 4.8. Registration............................................ 5
Section 4.9. Lender's Powers With Respect to Security Assets......... 5
Section 4.10. Calls................................................... 5
Section 4.11. Delegation By Lender.................................... 6
Section 4.12. Further Assurances...................................... 6
Section 4.13. Redemption of Prior Mortgages........................... 6
Section 4.14. Power of Attorney....................................... 6
Section 4.15. Avoidance of Payments................................... 7
Section 4.16. Powers to Lend.......................................... 7
ARTICLE V
DEALINGS WITH SECURITY ASSETS......................... 7
Section 5.1. Day to Day Business..................................... 7
Section 5.2. Charged Accounts........................................ 8
Section 5.3. Deposit of Proprietary Rights........................... 8
Section 5.4. Liability to Perform.................................... 8
ARTICLE VI
ENFORCEMENT.................................. 8
Section 6.1. When Security Becomes Enforceable....................... 8
Section 6.2. Enforcement of Security................................. 9
Section 6.3. Remedies, Waivers and Consents.......................... 9
ARTICLE VII
RECEIVER................................. 9
Section 7.1. Appointment and Powers of Receiver...................... 9
Section 7.2. Comply with Instructions................................ 11
Section 7.3. Removal and Remuneration................................ 12
Section 7.4. Lender May Exercise Receiver's Powers................... 12
Section 7.5. No Liability As Mortgagee In Possession................. 12
Section 7.6. Protection Of Third Parties............................. 12
Section 7.7. Expenses................................................ 12
Section 7.8. Indemnity............................................... 13
ARTICLE VIII
APPLICATION OF PROCEEDS............................ 13
Section 8.1. Order of Application.................................... 13
Section 8.2. Suspense Accounts....................................... 13
ARTICLE IX
MISCELLANEOUS PROVISIONS............................ 13
Section 9.01. Amendment.............................................. 13
Section 9.02. Severability........................................... 14
Section 9.03. Notices................................................ 14
Section 9.04. Consent to Jurisdiction................................ 14
Section 9.05. Captions............................................... 14
Section 9.06. Governing Law.......................................... 14
Section 9.07. No Partnership......................................... 14
Section 9.08. Counterparts........................................... 15
Section 9.09. Survival............................................... 15
Section 9.10. Integration............................................ 15
Section 9.11. Reproduction of Documents.............................. 15
Section 9.12. Successors and Assigns; Assignment..................... 15
Section 9.13. General Interpretive Principles........................ 15
This Issue of One Debenture, dated ________ __, 1994 (the
"Debenture"), from CalPetro Tankers (Bahamas I) Limited, a company organized
under the laws of The Commonwealth of the Bahamas (the "Owner") to California
Petroleum Transport Corporation, a corporation organized under the laws of the
State of Delaware (the "Lender") is issued pursuant to Clause __ of the
Memorandum of Association and Article 32 of the Articles of Association of
the Owner passed at the meeting of the Directors held on the __ day of
_________, 1994.
PRELIMINARY STATEMENT
The Owner has requested that the Lender make two loans to the
Owner: one in the aggregate principal amount equal to $____________ (the "Term
Loan") and one in the aggregate principal amount equal to $____________ (the
"Serial Loan" and, collectively with the Term Loan, the "Loans"). The Loans
will be made pursuant to the terms and conditions of two Loan Agreements, each
dated as of the date hereof, each between the Lender and the Owner. The net
proceeds of the Serial Loan and the Term Loan will be used by the Owner to
acquire the m.t. _________ (the "Vessel") from Chevron Transport Corporation
(the "Initial Charterer"). The Vessel will be bareboat chartered to the
Initial Charterer pursuant to the Bareboat Charter (the "Initial Charter"),
dated as of the date hereof, between the Owner and the Initial Charterer. As
collateral security for its obligations under the Loan Agreements, the Owner
will assign, pledge, mortgage and grant the Lender a security interest in,
inter alia, the Vessel, the Initial Charter, the earnings and insurances of
the Vessel and will grant this debenture in favor of the Lender.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and of other valuable consideration, receipt of
which is hereby acknowledged, the Owner and the Lender hereby agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this Debenture shall have the meanings
assigned to such terms in Schedule 1 to this Debenture, and the definitions of
such terms shall be equally applicable to both the singular and plural forms
of such terms.
ARTICLE II
COVENANT TO PAY
Section 2.1. Covenant to Pay. The Owner hereby covenants and
agrees to pay and discharge each sum owing under the Term Obligations and the
Serial Obligations as and when the same shall fall due, whether at maturity,
by acceleration or otherwise.
ARTICLE III
MORTGAGE, CHARGE AND ASSIGNMENT
Section 3.1. Charge. As continuing security for the Term
Obligations and the Serial Obligations, equally and ratably, the Owner hereby:
(a) conveys, transfers and assigns absolutely to and unto the Lender
all rights of the Owner in and to the Current Receivables by way
of fixed security;
(b) mortgages, charges and assigns, and agrees to mortgage, charge and
assign to the Lender all present and future rights of the Owner in
and to all freehold or leasehold property of the Owner and all
other estates or interests therein together with all trade
fixtures and fixed plant and machinery now and for the time being
thereon, by way of a fixed charge;
(c) mortgages, charges and assigns, and agrees to mortgage, charge and
assign, to the Lender all rights now owned or hereafter acquired
in and to the goodwill, franchises, patent rights, copyrights,
trademarks and other intangible Assets of the Owner by way of
filed charge;
(d) mortgages, charges and assigns, and agrees to mortgage, charge and
assign, to the Lender all rights relating to the aforesaid
property specified in Sections 3.1(a), (b) and (c) including,
inter alia, negotiable instruments, legal and equitable charges,
reservations of property rights, rights of action, collection,
recovery or security, rights of tracing and unpaid vendor's liens
and similar and associated rights, by way of fixed legal mortgage
and charge; and
(e) mortgages and charges in favor of the Lender all rights of the
Owner now owned or hereafter acquired in and to all other Assets
for the time being of the Owner not subject to the fixed
securities created by Sections 3.1(a), (b), (c) and (d)
wheresoever situate (including, inter alia, all undertakings and
businesses of the Owner) by way of a floating charge and the Owner
shall not be at liberty to create any mortgage or charge on any of
the securities created by this Section 3.1(e) and no lien shall in
any case or in any manner arise on or affect any part of the said
securities in priority to or pari passu with all charges hereby
created, it being the intention that the Owner shall have no
power, without the written consent of the Lender, to part with or
dispose of any part of the said securities except by way of sale
in the ordinary course of its business;
provided, however, that upon the unconditional payment and satisfaction
of the Serial Obligations, the rights of the Lender hereunder will
secure solely and exclusively the Term Obligations;
provided further, that upon the unconditional payment and satisfaction
of the Term Obligations the rights of the Lender hereunder will
terminate and the Lender will at the direction, cost and expense of the
Owner release or reassign to the Owner all remaining rights of the
Lender in and to the balance of the Security Assets.
Section 3.2. Legal Securities. The Owner will forthwith at the
request of the Lender execute a legal mortgage, charge or assignment over all
or any of the Security Assets subject to or intended to be subject to any
fixed security hereby created in favor of the Lender in such form as the
Lender may reasonably require.
Section 3.3. Conversion of Floating Charge. The Lender may at any
time by notice to the Owner convert the floating charges hereby created into a
specific charge as regards any Assets specified in the notice which the Lender
shall consider to be in danger of being seized or sold under any form of
distress, attachment, execution or other legal process or to be otherwise in
jeopardy and (whether or not this security has become enforceable) may at any
time appoint a Receiver (as defined in Section 7.1 hereof) thereof.
Section 3.4. Negative Pledge. The Owner shall not, without the
prior written consent of the Lender, permit the sale, transfer, assignment
lease or other disposition of any Security Asset, or any Encumbrance or other
right in or over any Security Asset to subsist, arise or be created, other
than such Encumbrance as is created by this Debenture.
Section 3.5. New Accounts. If the Lender receives or is deemed to
be affected by notice whether actual or constructive of any subsequent
Encumbrance or other interest affecting any Security Asset or the proceeds of
sale thereof, the Lender may open a new account or accounts for the Owner. If
the Lender does not open a new account it shall nevertheless be treated as if
it had done so at the time when it received or was deemed to have received
notice and as from that time all payments made to the Lender shall be credited
or be treated as having been credited to the new account and shall not operate
to reduce the amount for which this Debenture is security.
ARTICLE IV
PRESERVATION OF SECURITY
Section 4.1. Continuing Security. The security constituted by this
Debenture shall be a continuing security and shall not be satisfied by any
intermediate payment or satisfaction of the Term Obligations and the Serial
Obligations but shall secure the ultimate balance of the Term Obligations and
the Serial Obligations; provided, however, that, in the event that the Serial
Obligations are satisfied and paid in full pursuant to the terms and
conditions of the Serial Loan Agreement, this Assignment will be security
solely and exclusively for the Term Obligations. The security hereby given
shall be in addition to and shall not be discharged, released, prejudiced or
otherwise affected by any other security or Encumbrance now or hereafter held
by the Lender for the Term Obligations or the Serial Obligations.
Section 4.2. Waiver of Defenses. The obligations of the Owner
under this Debenture and this security shall not be discharged, released,
prejudiced or otherwise affected by any act, omission or circumstance which
but for this provision might so operate or otherwise release or discharge the
Owner from the Term Obligations or the Serial Obligations, or the security
created under this Debenture including without limitation and whether or not
known to or discoverable by the Owner or the Lender:
(a) any time, indulgence, waiver, consent or other relief granted to
or composition with the Owner or any other Person;
(b) the taking, variation, extension, compromise, renewal or release
of, or refusal or neglect to perfect or enforce, any rights under
the Term Loan Agreement, the Serial Loan Agreement, this
Debenture, any Security Document or any other guarantee, agreement
or obligation or any right against, or any security granted by,
the Owner or any other Person;
(c) any irregularity, invalidity or unenforceability of any obligation
of the Owner under the Term Loan Agreement, the Serial Loan
Agreement, any Security Document, this Debenture or any other
guarantee, of any government or authority (whether of right or in
fact) purporting to reduce or otherwise affect any such obligation
to the intent that such obligation and this security shall remain
in full force and this Debenture shall be construed accordingly as
if there were no such irregularity, unenforceability, invalidity,
law or order;
(d) any legal limitation, disability, incapacity or other circumstance
relating to the Owner, any guarantor or any other Person;
(e) any defect in or invalidity or inadequacy of the constitution or
incorporation or borrowing powers of the Owner or of its board of
directors, executive committee or other equivalent of analogous
body or in the authorization, execution or delivery of the Term
Loan Agreement, the Serial Loan Agreement, any Security Document,
this Debenture or any other guarantee, agreement or obligation; or
(f) any supplement, amendment or modification to the terms of the Term
Loan Agreement, the Serial Loan Agreement, this Debenture, any
other Security Document or any other guarantee, agreement or
obligation.
Section 4.3. Immediate Recourse. The Owner waives any right it may
have of first requiring the Lender to proceed against or claim payment from
the Owner or enforce the Term Loan Agreement, the Serial Loan Agreement, any
Security Documents or other guarantee, agreement or obligation before
enforcing this Debenture.
Section 4.4. Preservation of Rights. Until the Term Obligations
and the Serial Obligations have been irrevocably paid and discharged in full,
the Lender may:
(a) refrain from applying or enforcing any other security, money or
right held or received by the Lender in respect of the Term
Obligations or the Serial Obligations or apply and enforce the
same in such manner and order as the Lender sees fit; and
(b) hold in a suspense account (without liability to pay interest
thereon) any moneys received or on account of this Debenture by
way of a partial payment.
Section 4.5. Additional Security. This Debenture shall be in
addition to and shall not in any way be prejudiced by any other security now
or hereafter held by the Lender.
Section 4.6. Certificate. A certificate of the Lender setting
forth the amount due from the Owner in respect of the Term Obligations and/or
the Serial Obligations shall, in the absence of manifest error, be prima facie
evidence of such amount.
Section 4.7. Discharge. Where any discharge (whether in respect of
the Term Loan Agreement, the Term Obligations, the Serial Loan Agreement, the
Serial Obligations, this Debenture, or any other guarantee, agreement,
obligation or security or otherwise) is made in whole or in part or any
arrangement is made on the faith of any payment, security or other disposition
which is avoided or must be repaid on bankruptcy, liquidation, winding-up,
dissolution or otherwise, this security and the obligations of the Owner under
this Debenture shall continue as if there had been no such discharge or
arrangement.
Section 4.8. Registration. The Owner hereby agrees to arrange for
this Debenture, any Security Asset or any agreement, document or instrument
relating thereto to be registered with or notified to any Person to preserve
or perfect the Lender's security in any Security Asset.
Section 4.9. Lender's Powers With Respect to Security Assets. The
Lender may without demand or notice to the Owner being required at any time
after this security becomes enforceable exercise at its discretion (in the
name of the Owner or otherwise) and without any further consent or authority
by the Owner, any right which may be exercised by the Person in whose name any
Security Asset is registered or who is the holder thereof under the terms
thereof or otherwise including, but without limitation, all the powers given
to trustees by statute in respect of securities or property subject to a
trust; provided, however, that until the security hereby constituted becomes
enforceable, the Lender shall procure that the rights attached to each such
Security Asset are exercised in such manner as the Owner shall direct so long
as the same is not inconsistent with any term of the Term Loan Agreement, the
Serial Loan Agreement or this Debenture and account to the Owner for any sum
or other distribution paid in respect of such Security Asset.
Section 4.10. Calls. The Owner will for so long as the Term
Obligations and the Serial Obligations remain outstanding pay all sums which
may become due in respect of the Security Assets and in the event of default
the Lender may if it thinks fit make such payments on behalf of the Owner.
Any sums so paid by the Lender shall be immediately due and payable by the
Owner to the Lender without demand or notice being required.
Section 4.11. Delegation By Lender. The Lender may at any time and
from time to time delegate by power of attorney or in any other manner to any
Person or Persons all or any of the rights and discretions which are for the
time being exercisable by the Lender under this Debenture in relation to any
Security Asset. Any such delegation may be made upon such terms (including
power to sub-delegate) and subject to such regulations as the Lender may think
fit. The Lender shall not be in any way liable or responsible to the Owner for
any loss or damage arising from any act, default, omission or misconduct on
the part of any such delegate or sub-delegate.
Section 4.12. Further Assurances. The Owner shall at its own
expense execute and deliver all such agreements, documents and instruments and
do all such assurances, acts and things as the Lender may require for
perfecting or protecting this security over any Security Asset or for
facilitating the realization of such property and in the exercise of all
rights vested in the Lender or in any sub-delegate as aforesaid. The Owner
shall in particular execute all transfers, conveyances, assignments and
assurances of such property whether to the Lender or its nominees and give all
notices, orders and directions which the Lender may think expedient and, for
the purposes of this Section, a certificate in writing by the Lender to the
effect that any particular assurance, act or thing required by it is
reasonably required shall be conclusive evidence of such fact in favor of all
third parties.
Section 4.13. Redemption of Prior Mortgages. The Lender may at any
time after the security hereby constituted has become enforceable redeem any
prior Encumbrance against any Security Asset or procure the transfer thereof
to itself and may settle and pass the accounts of the prior Encumbrances. Any
accounts so settled and passed shall be conclusive and binding on the Owner.
All principal moneys, interest, costs, charges and expenses of and incidental
to such redemption and transfer shall be immediately due by the Owner to the
Lender without notice or demand being required.
Section 4.14. Power of Attorney. (a) The Owner hereby by way of
security irrevocably nominates, constitutes and appoints the Lender and every
Receiver of any Security Asset appointed hereunder and every such delegate or
sub-delegate as aforesaid, each of them acting alone or jointly with any other
of them, to be its attorney (the "Attorney") and on its behalf and in its name
or otherwise to sign under seal or otherwise and deliver all such agreements,
documents and instruments and do all such assurances, acts and things which the
Owner ought to do but fails to do under the covenants and provisions contained
in the Indenture or this Debenture (including without prejudice to the
generality of the foregoing to make any demand upon or give any notice or
receipt to any Person owing moneys to the Owner and to execute and deliver any
charges, legal and equitable generally in its name and on its behalf to
exercise all or any of the rights conferred by or pursuant to this Debenture
or by statute on the Attorney and (without prejudice to the generality of the
foregoing) to sign under seal or otherwise and deliver and otherwise perfect
any assurance, agreement, instrument or act which the Attorney may deem proper
in or for the purpose of exercising any of such rights.
(b) The Owner hereby ratifies and confirms and agrees to ratify
and confirm any such Attorney described in Section 4.14(a).
Section 4.15. Avoidance of Payments. No assurance, security or
payment which may be avoided under any enactment relating to bankruptcy, and
no release, settlement or discharge given or made by the Lender on the faith
of any such assurance, security or payment, shall prejudice or affect the
right of the Lender to enforce the security created by or pursuant to this
Debenture in respect of the full extent of the moneys thereby secured. The
Lender shall be at liberty at its absolute discretion to retain the security
so created as security for the Term Obligations and Serial Obligations,
equally and ratably, for a period of seven months in the case of fixed
security and thirteen months in the case of floating security after the Term
Obligations and Serial Obligations shall have been paid in full,
notwithstanding any release, settlement, discharge or arrangement given or
made by the Lender on or as a consequence of, such termination of liability.
If at any time within the period of six months in the case of fixed security
and twelve months in the case of floating security after such termination a
petition shall be presented to a competent court for an order for the winding
up of the Owner or the Owner shall commence to be wound up voluntarily, the
Lender shall be at liberty, notwithstanding as aforementioned, to continue to
retain such security or any part thereof for and during such further period as
the Lender in its absolute discretion shall determine. The Owner agrees that
such security shall be deemed to have been and to have remained held by the
Lender as and by way of security for the payment to the Lender of all or any
sums which are now or may become due and owing to the Lender under the Term
Loan Agreement, the Serial Loan Agreement and the rest of the Security
Documents.
Section 4.16. Powers to Lend. The Lender may advance money on the
security of any Security Asset for the purpose of defraying any costs,
charges, losses and expenses which shall be paid or incurred by it in relation
to this Debenture (including the remuneration of any Receiver) or which the
Lender anticipates may be paid or incurred in the exercise of the rights
vested in it or for all other purposes of this Debenture or any of them and
the Lender may advance such moneys at such rates of interest and generally on
such terms and conditions as it shall think fit.
ARTICLE V
DEALINGS WITH SECURITY ASSETS
Section 5.1. Day to Day Business. For so long as the security
hereby constituted shall not have become enforceable, the Owner may in the
ordinary course of trading (a) for the purpose of getting in and realizing any
Current Receivable compromise, settle, release or otherwise dispose any
thereof, including any Encumbrance or other security relating thereto, save
that nothing in this Section 5.1 shall be construed so as to permit the Owner
to sell, factor or discount any Current Receivable and, (b) acquire, deal in
and dispose of any Security Asset specified in Section 3.1(b) other than
pursuant to the applicable terms of the Term Loan Agreement and the Serial
Loan Agreement.
Section 5.2. Charged Accounts. The Owner shall cause all sums
hereafter received or recovered by or for it in respect of any Current
Receivable to be directly credited to a separate and distinct account as the
Lender may from time to time designate and, if called upon to do so by notice
in writing from the Lender, shall execute an absolute assignment of any such
Current Receivable in favor of the Lender, all at the cost of the Owner. Until
the security hereby constituted is fully discharged in accordance with the
terms hereof, the Owner shall not be entitled to withdraw any sum standing to
the credit of any such account established as aforesaid without the prior
written consent of the Lender.
Section 5.3. Deposit of Proprietary Rights. The Owner shall, if
the Lender so requires, deposit with the Lender all certificates and other
documents of title or evidence of ownership in relation to the patents and
rights referred to in Section 3.1(c).
Section 5.4. Liability to Perform. Notwithstanding any other
provision herein contained to the contrary, the Owner shall remain liable to
observe and perform all of the respective conditions and obligations assumed
by it in respect of each Security Asset and the Lender shall be under no
obligation by reason of this Debenture, nor shall the Lender be required in
any manner, to perform or fulfil any obligation of the Owner in respect of any
Security Asset or to make any payment or make any enquiry as to the maturity,
amount, nature or sufficiency of any rental, interest, proceeds, payments or
receipts received by it or them or the Owner or to present or file any claim
or take any other action or give any notice to collect, exercise or enforce
the payment of any amount or the taking up of any rights or property to which
the Owner may have been or to which it may be now or hereafter entitled
thereunder at any time.
ARTICLE VI
ENFORCEMENT
Section 6.1. When Security Becomes Enforceable. The security
hereby conferred shall become immediately enforceable and the floating charge
created by this Debenture shall be deemed to have crystallized and the power
of sale and other powers conferred by statute as varied or amended by this
Debenture shall be immediately exercisable (i) if the Owner fails to meet the
Term Obligations and the Serial Obligations in the manner specified in Section
2.1 or (ii) upon and after the occurrence of any Event of Default as defined
in the Term Loan Agreement or the Serial Loan Agreement. After this security
has become enforceable, the Lender may in its discretion enforce all or any
part of this security, and exercise all or any rights of enforcement hereby
granted, in such manner as the Lender sees fit.
Section 6.2. Enforcement of Security. For the purposes of all
powers implied by statute the Term Obligations and the Serial Obligations
shall be deemed to have become due and payable on the date hereof and any
statutory restrictions on the power of sale and restrictions on the right of
consolidation shall not apply to this security.
Section 6.3. Remedies, Waivers and Consents. No delay or omission
of the Lender in exercising any right under this Debenture shall impair or be
construed as a waiver of such right nor shall any single or partial exercise
of any such right preclude any further exercise thereof or the exercise of any
other right. The rights provided in this Debenture are cumulative and not
exclusive of any rights provided by law, agreement or otherwise. Any waiver
and any consent by the Lender under this Debenture must be in writing and may
be given subject to any conditions thought fit by the Lender. Any waiver or
consent shall be effective only in the instance and for the purpose for which
it is given.
ARTICLE VII
RECEIVER
Section 7.1. Appointment and Powers of Receiver. At any time after
this security becomes enforceable the Lender may without further notice
appoint in writing under its hand any one or more Person(s) to be a receiver
or receiver and manager (hereinafter each called "a Receiver") as the Lender
at its sole discretion may see fit of any Security Asset in like manner in
every respect as if the Lender had become entitled under statute to exercise
the power of sale thereby conferred. Every Receiver so appointed shall, in
addition to any powers conferred by statute or common law, have and be
entitled to exercise all rights to do any or all of the following things:
(a) Take Possession. Enter upon and take immediate possession of, get
in and collect any Security Asset and undertake any works of
demolition, building, reconstruction, repair or decoration thereon;
(b) Sell Assets. Subject to any necessary consent or approval of any
judicial, administrative, governmental or other regulatory body,
office or agency, sell, convert into money and realize any
Security Asset by public auction or private contract, dispose of,
grant options and other rights in respect of and exercise all
other rights conferred on an owner under any statute, at common
law or otherwise, in respect of any Security Asset and generally
in such manner and on such terms (which may consist wholly or
partly of shares or securities of any company or body corporate)
as the Receiver shall think fit and transfer, convey, assign or
grant an assurance of the same in the name and on behalf of the
Owner. Without prejudice to the generality of the foregoing, the
Receiver may do any of these things for a consideration consisting
of cash, debentures or other obligations, shares or other valuable
consideration in cash or in any other form whatsoever and any such
consideration may be payable in a lump sum or by installments
spread over such period as the Receiver may think fit;
(c) Compromise. Settle, adjust, refer to arbitration, compromise and
arrange any claims, accounts, disputes, questions and demands with
or by any Person who is or claims to be a creditor of the Owner or
relating in any way to any Security Asset;
(d) Borrow and Create Security. Borrow or raise money and secure the
repayment thereof and interest thereon by mortgaging,
sub-mortgaging or otherwise charging any Security Asset or this
Debenture (whether or not in priority to the sums and obligations
secured by this Debenture) in such manner and on such terms as the
Receiver shall think fit; provided, however, that:
(i) no Receiver shall exercise such right without first
obtaining the written consent of the Person appointing him
and the Lender shall not incur any responsibility to the
Owner or any other Person by reason of giving or refusing
its consent, whether directly or subject to any limitation or
condition; and
(ii) no Person lending such money shall be concerned to enquire
as to the existence of such consent or the terms thereof or
as to the propriety or purpose of the exercise thereof or to
see to the application of any money so borrowed or raised;
(e) Employ Agents. Employ solicitors, managers, agents and others as
the Receiver shall deem necessary;
(f) Receipts. Give valid receipts and discharges for all moneys and
claims and execute all assurances and things which may be proper
or desirable for realizing any Security Assets;
(g) Consideration. Receive or pay any consideration in cash or other
valuable consideration and so that the same may be receivable or
payable either immediately or at a later time and in a lump sum or
by installments spread over such period as the Receiver shall
think fit;
(h) Dealings. Generally to deal with and effect any transaction or
arrangement of any kind whatsoever in respect of any Security
Asset;
(i) Legal Proceedings. Settle, arrange, compromise and submit to
arbitration any accounts, claims, questions or disputes whatsoever
which may arise in connection with any Security Asset or in any
way relating to the security constituted by this Debenture, to
bring, take, defend, compromise, submit to and discontinue any
actions, suits, arbitration or proceedings whatsoever whether
civil or criminal in relation to the matters aforesaid, to enter
into, complete, disclaim, abandon or disregard, determine or
rectify all or any of the outstanding agreements or arrangements
of the Owner in any way relating to or affecting the Security
Assets or any part thereof and to allow time for payment of any
debts either with or without security as the Receiver shall think
expedient;
(j) In Owner's Name. Generally at his option to use the name of the
Owner in the exercise of all or any of the rights hereby conferred;
(k) Exercise of Rights. Exercise, or permit the Owner or any nominee
of the Owner to exercise, any rights incident to the ownership of
any Security Asset in such manner as the Receiver may think fit
and in particular (as regards shares, stock and securities) any
voting rights conferred by the same and (as regards securities)
any rights of enforcing the same by foreclosure, sale or otherwise;
(l) Corporate Transfers. Transfer any Security Asset to any other
company or body corporate, whether or not formed or acquired for
the purpose;
(m) Carry on Business. Generally manage and carry on and conduct any
of the undertakings and businesses of the Owner;
(n) Calls. Make calls, conditionally or unconditionally, on the
members of the Owner in respect of all or any part of its uncalled
capital with such and the same rights of enforcement as are
conferred by the Memorandum of Association and Articles of
Association of the Owner upon its directors in this respect;
(o) General Powers. Sign under seal or otherwise and deliver all such
agreements, documents and instruments and do all such other acts
and things as the Receiver may consider desirable or necessary for
realizing any Security Asset or incidental or conducive to any of
the matters or rights conferred on a Receiver under or by virtue
of this Debenture and to exercise in relation to any Security
Asset all such rights as the Receiver should be capable of
exercising if the Receiver were the beneficial owner of the same;
and
(p) Moneys received by Receiver. All moneys received by a Receiver
shall after providing for the matters specified by any law be
applied by him in or towards satisfaction of this Debenture and
thereafter of any other incumbrance of which he shall have notice
and thereafter the Receiver shall pay the residue of the moneys
received by him to the Owner.
Section 7.2. Comply with Instructions. Any Receiver shall in the
exercise of the Receiver's rights conform to any regulations and directions
from time to time made and given by the Person appointing him but so that no
Person dealing with the Lender or any Receiver shall be concerned to enquire
whether the Receiver has so conformed to any such regulations or directions.
Section 7.3. Removal and Remuneration. The Lender may from time to
time by writing under its hand remove any Receiver appointed by it and may
whenever it may deem it expedient appoint a new Receiver in the place of any
Receiver whose appointment may for any reason have terminated and may from
time to time fix the remuneration of any Receiver appointed by it.
Section 7.4. Lender May Exercise Receiver's Powers. All or any of
the rights which are conferred by this Debenture (either expressly or
impliedly) upon a Receiver of any Security Asset may be exercised after the
security hereby created becomes enforceable by the Lender in relation to any
Security Asset without first appointing a Receiver of the same or
notwithstanding the appointment of a Receiver of the same.
Section 7.5. No Liability As Mortgagee In Possession. The Lender
shall not nor shall any Receiver appointed as aforesaid by reason of the
Lender or the Receiver entering into possession of any Security Asset be
liable to account as mortgagee in possession or be liable for any loss or
realization or for any default or omission for which a mortgagee in possession
might be liable. Every Receiver duly appointed by the Lender shall be deemed
to be the agent of the Owner for all purposes and shall as such agent be
deemed to be in the same position as a Receiver duly appointed by a mortgagee
under statute. The Owner alone shall be responsible for its agreements,
obligations, acts, omissions, defaults and losses and the Lender shall not
incur any responsibility therefor (either to the Owner or to any other Person
whatsoever) by reason of appointing such Receiver or for any other reason
whatsoever. Every such Receiver and the Lender shall be entitled to all the
rights, privileges and immunities by statute conferred on mortgagees and
receivers when such receivers have been duly appointed.
Section 7.6. Protection Of Third Parties. No purchaser, mortgagee
or other Person dealing with the Lender or the Receiver or the agents of the
Lender or the Receiver shall be concerned to enquire whether any of the Term
Obligations or Serial Obligations are due or owing, the right which the Lender
or the Receiver is purporting to exercise has become exercisable or any money
remains due under this Debenture, as to the propriety or regularity of the
actions of the Lender or such Receiver, or to see to the application of any
money paid to the Lender or to such Receiver.
Section 7.7. Expenses. All costs, charges and expenses incurred
and all payments made by the Lender or any Receiver appointed hereunder in the
exercise in good faith of any right hereby conferred whether or not occasioned
by any act, neglect or default of the Lender or such Receiver shall bear
interest from the date of the same being incurred or becoming due at the
Default Rate. The amount of all such costs, charges, expenses and payments and
all interest thereon and all remuneration payable hereunder shall be payable
by the Owner on demand. All such costs, charges, expenses and payments shall
be paid and charged as between the Lender and the Owner on the basis of a full
indemnity and not on the basis of party and party or any other kind of
taxation.
Section 7.8. Indemnity. Each of the Lender and every Receiver,
attorney, manager, agent or other Person appointed by the Lender hereunder
shall be entitled to be indemnified out of the Security Assets in respect of
all obligations, costs, charges and expenses incurred and payments made by
such Person in good faith in the execution or purported execution of any right
vested in such Person pursuant hereto and against all actions, proceedings,
obligations, costs, claims and demands in respect of any matter or thing done
or omitted in any way relating to any Security Asset and the Lender and any
such Receiver may retain and pay all sums in respect of the same out of any
moneys received under the rights hereby conferred.
ARTICLE VIII
APPLICATION OF PROCEEDS
Section 8.1. Order of Application. Any moneys received by the
Lender pursuant to this Debenture or under the powers hereby conferred shall
after the security hereby constituted shall have become enforceable but
subject to the payment of any claims having priority to this security be
applied for the following purposes and in the following order of priority (but
without prejudice to the right of the Lender to recover any shortfall from the
Owner):
(a) in satisfaction of or provision for all costs, charges and
expenses incurred and payments made by the Lender or any Receiver
appointed hereunder and of all remuneration due hereunder with
interest on such costs, charges, expenses and payments at the
Default Rate;
(b) in or towards payment of interest on the Term Obligations and
Serial Obligations, pro rata, in accordance with their respective
outstanding balances;
(c) in or towards payment of principal on the Term Obligations and
Serial Obligations, pro rata, in accordance with their respective
outstanding balances;
(d) in payment of the surplus (if any) to the Owner or other Person
entitled thereto.
Section 8.2. Suspense Accounts. Any moneys received under the
rights hereby conferred may, at the discretion of the Lender, be placed in a
suspense account and kept there for so long as the Lender thinks fit.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.01. Amendment. This Debenture may be amended from time
to time by written agreement signed by the parties hereto.
Section 9.02. Severability. If any provision of this Debenture is
held to be in conflict with any applicable statute or rule of law or is
otherwise held to be unenforceable for any reason whatsoever, such
circumstances shall not have the effect of rendering the provision in question
inoperative or unenforceable in any other case or circumstance, or of
rendering any other provision or provisions herein contained invalid,
inoperative, or unenforceable to any extent whatsoever. The invalidity of any
one or more phrases, sentences, clauses or Sections of this Debenture
contained, shall not affect the remaining portions of this Debenture, or any
part thereof.
Section 9.03. Notices. All demands, notices and communications
hereunder shall be in writing, personally delivered or mailed by certified
mail-return receipt requested, and shall be deemed to have been duly given
upon receipt (a) in the case of the Lender, at the following address: c/o JH
Management Corporation, Room 6/9, One International Place, Boston,
Massachusetts 02110-2624, (b) in the case of the Owner, at the following
address: United House, 14-16 Nelson Street, Douglas, Isle of Man, or at other
such address as shall be designated by such party in a written notice to the
other parties.
Section 9.04. Consent to Jurisdiction. Any legal suit, action or
proceeding against the Owner arising out of or relating to this Debenture, or
any transaction contemplated hereby, may be instituted in any federal or state
court in The City of New York, State of New York and the Owner hereby waives
any objection which it may now or hereafter have to the laying of revenue of
any such suit, action or proceeding, and the Owner hereby irrevocably submits
to the jurisdiction of any such court in any such suit, action or proceeding.
The Owner hereby irrevocably appoints and designates CT Corporation System,
having an address at 1633 Broadway, New York, New York, its true and lawful
attorney-in-fact and duly authorized agent for the limited purpose of
accepting servicing of legal process and the Owner agrees that service of
process upon such party shall constitute personal service of such process on
such Person. The Owner shall maintain the designation and appointment of such
authorized agent until all amounts payable under this Debenture shall have
been paid in full. If such agent shall cease to so act, the Owner shall
immediately designate and appoint another such agent satisfactory to the Lender
and shall promptly deliver to the Lender evidence in writing of such other
agent's acceptance of such appointment.
Section 9.05. Captions. The captions or headings in this Debenture
are for convenience only and in no way define, limit or describe the scope or
intent of any provisions or sections of this Debenture.
Section 9.06. Governing Law. This Debenture shall be governed by
and interpreted in accordance with the laws of the [Commonwealth of the
Bahamas] [Isle of Man], without giving effect to the principles of conflicts
of law.
Section 9.07. No Partnership. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture among the parties
hereto and the services of each party shall be rendered as an independent
contractor and not as agent for any other party.
Section 9.08. Counterparts. This Debenture may be executed in any
number of counterparts and by different parties hereto on separate
counterpart, each of which shall be deemed to be an original. Such
counterparts shall constitute one and the same agreement.
Section 9.09. Survival. The representations, covenants and
agreements contained in or made pursuant to this Debenture in respect of
either party hereto shall survive the execution and delivery of this Debenture
and shall continue in effect so long as such party's obligations hereunder
remain outstanding.
Section 9.10. Integration. This Debenture and the Schedule and
Exhibits hereto constitute the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements, understandings or representations pertaining to the subject
matter hereof, whether oral or written. There are no warranties,
representations or other agreements between the parties in connection with the
subject matter hereof except as specifically set forth or incorporated herein.
Section 9.11. Reproduction of Documents. This Debenture and all
documents relating thereto, including, without limitation, (a) consents,
waivers and modifications which may hereafter be executed, (b) documents
received by any party at the closing, and (c) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made in the regular course
of business) and that any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence.
Section 9.12. Successors and Assigns; Assignment. This Debenture
shall be binding upon and inure to the benefit of the Owner and the Lender and
their respective successors and assigns. The Owner shall not have the right
to assign its rights hereunder or any interest herein without the prior
written consent of the Lender. The Lender, at its sole option, shall have the
right to assign this Debenture, the Serial Loan Agreement, the Term Loan
Agreement, the Security Documents and any of its rights and interest hereunder
and thereunder.
Section 9.13. General Interpretive Principles. For purposes of
this Debenture except as otherwise expressly provided or unless the context
otherwise requires:
(a) the defined terms in this Debenture shall include the plural
as well as the singular, and the use of any gender herein shall be deemed to
include any other gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles as in effect on the date hereof;
(c) references herein to "Articles", "Sections", "Subsections",
"paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, paragraphs and other subdivisions
of this Debenture;
(d) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to paragraphs and
other subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Debenture as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
IN WITNESS WHEREOF this Debenture has been executed by the Owner
the day and year first above written.
SIGNED, SEALED and DELIVERED )
as a Deed and Debenture )
by )
for and on behalf of )
CALPETRO TANKERS (BAHAMAS I)
LIMITED )
in the presence:- )
SIGNED by )
for and on behalf of )
CALIFORNIA PETROLEUM TRANSPORT
CORPORATION )
in the presence of:- )
SCHEDULE 1
Defined Terms Used in the Debenture
"Assets" means, in relation to any person, the whole or any part of its
business, undertaking, property and assets and includes, without limitation,
any right to receive revenues.
"Assignment of Earnings and Insurances" means the assignment between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner assigns to the Lender all of its
right, title and interest in, to and under the freights and hires (as well as
any charters entered into after the Closing Date) with respect to the Vessel
to secure its obligations under the Loan Agreements.
"Assignment of Guarantee" means the assignment between the Owner and the
Lender, as amended from time to time in accordance with the terms thereof,
pursuant to which the Owner assigns to the Lender all of its right, title and
interest in, to and under the Chevron Guarantee to secure its obligations
under the Loan Agreements.
"Chevron" means Chevron Corporation.
"Chevron Guarantee" means the guarantee of the obligations of the
Initial Charter given by Chevron.
"Closing Date" means ________ __, 1994.
"Current Receivables" means (a) all obligations of the trade debtors of
the Owner due or owing to the Owner on account of the prevailing debit
balances of the present book debts of the Owner and (b) all rights relating to
the aforesaid property specified in paragraph (a), including, inter alia,
negotiable instruments, legal and equitable charges, reservations of property
rights, rights of action, collection, recovery or security, rights of tracing
an unpaid vendor's liens and similar and associated rights (and each reference
to a "Current Receivable" shall be construed as a reference to the whole or
any part of any one or more of them).
"Encumbrance" means any encumbrance and includes any mortgage, charge
(whether fixed or floating, pledge, lien, hypothecation, title retention or
other security agreement or security interest of any kind whatsoever and
howsoever arising and any equivalent or analogous interest to any of the
foregoing.
"Event of Default" means an Event of Default under Section ____ of the
Loan Agreement.
"guarantee" means any guarantee and also includes any indemnity, any
other form of assurance against financial loss and any other contingent
obligation or other obligation in respect of the payment of, or indemnity
against the consequences of default in the payment of, any indebtedness of any
person or the performance of any obligation by any person (and each reference
to the act of guaranteeing shall be construed accordingly).
"Initial Charter" means with respect to each Vessel, the Bareboat
Charter, dated as of ________ 1, 1994, between the Initial Charterer and
the Owner.
"Initial Charterer" means Chevron Transport Corporation.
"Issue of One Debenture" means each Issue of One Debenture between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner grants to the Lender a security
interest in all of its assets.
"Person" means an individual, a partnership, a corporation, a joint
venture, an unincorporated association, a joint-stock company, a trust, or
other entity or a government or any agency or political subdivision thereof.
"right" means any right (actual or contingent, present or future)
expressed to be created under any agreement, law or directive, or arising by
operation of law and includes any power, authority, discretion, privilege,
remedy, title or interest arising under, by reason of, or in connection
therewith.
"Security Assets" means all of the present and future assets of the
Owner, including, inter alia, the Current Receivables (and each reference to a
"Security Asset" shall be construed as a reference to the whole or any part of
any one or more of them).
"Security Documents" means the Loan Agreement, the Mortgage, the
Assignment of Charter, the Assignment of Earnings and Insurances, the
Assignment of Guarantee, the Assignment of Management Agreement, the Issue of
One Debenture, collectively.
"Serial Loan Agreement" means the Loan Agreement, dated as of _______
1, 1994 between the Lender and the Owner pursuant to which the Lender will
make the Serial Loan to the Owner.
"Serial Obligations" means the payment, performance or obligations of
any kind or nature whatsoever of the Owner under and pursuant to the Serial
Loan Agreement, any Security Document and any instrument, agreement or
document referred to therein.
"Term Loan Agreement" means the Loan Agreement, dated as of _______ 1,
1994 between the Owner and the Lender pursuant to which the Lender makes the
Term Loan to the Owner.
"Term Obligations" means the payment, performance or obligations of any
kind or nature whatsoever of the Owner under and pursuant to the Term Loan
Agreement, any Security Document and any instrument, agreement or document
referred to therein.
"Trustee" means Chemical Trust Company of California.
EXHIBIT 10.1
[COMPANY NAME]
GUARANTEE
In consideration of your company (herein aftercalled "Owners") executing a
certain bareboat charter party (herein called the "Charter") with Chevron
Transport Corporation, a corporation duly organized and existing under the
laws of Liberia (herein called the "Charterers"), for the bareboat charter
of one (1) single screw 149,000 DWT tanker [SHIP NAME/HULL NUMBER] (herein
called the "Vessel"), the undersigned, jointly and severally with
Charterer, does hereby irrevocably and unconditionally guarantee to you,
due and faithful performance by Charterer of all Charterer's liabilities
and responsibilities under the Charter and any supplement, amendment,
change or modification thereto as aforesaid (hereby expressly waiving
notice of any such supplement, amendment, change or modification as may be
agreed to by the Charterer and confirming that this Guarantee shall be
fully applicable to the Charter as so supplemented, amended, changed or
modified).
This Guarantee shall become null and void (and the letter shall be
forthwith returned to us) upon the occurrence of any of the following
events: (1) termination of the Charter in accordance with its terms and
conditions, (2) Owners' assignment of the Charter, (3) sale of the Vessel
(excepting such a sale in connection with the initial financing of the
Vessel).
The validity, construction and enforceability of this Guarantee shall be
governed, in all respects, by the laws of New York.
GUARANTOR:
CHEVRON CORPORATION
By: ________________________
Date:_______________________
______________________________________________________________________________
______________________________________________________________________________
[NAME OF OWNER]
- and -
CHEVRON TRANSPORT CORPORATION
BAREBOAT CHARTER
______________________________________________________________________________
______________________________________________________________________________
TABLE OF CONTENTS
Page No.
1. Vessel to be Chartered............................................... 1
2. Period of Charter.................................................... 1
3. Time and Place of Delivery........................................... 1
4. Charterers' right in respect of the Vessel........................... 3
5. Use and Trade of Vessel.............................................. 3
6. Documentation and House Flag......................................... 4
7. Maintenance and Operation............................................ 4
8. Redelivery and Status................................................ 7
9. Use of Vessel and Payment of Hire.................................... 9
10. Mortgage............................................................. 10
11. Insurance............................................................ 10
12. Total Loss, Requisition for Title, Capture, Seizure.................. 13
13. Requisition for Hire................................................. 14
14. Liens; Notice on Vessel.............................................. 15
15. Salvage.............................................................. 16
16. General Average...................................................... 16
17. Default; Remedies.................................................... 16
18. Termination.......................................................... 19
19. Payments on Termination.............................................. 20
20. Assignment and Sub Charter........................................... 20
21. Indemnity............................................................ 21
22. Purchase Option...................................................... 23
23. General.............................................................. 23
24. Definitions.......................................................... 26
BAREBOAT CHARTER
THIS BAREBOAT CHARTER (hereinafter called the "Charter") made as
of ____ day of ___________, 1994 BY and BETWEEN ___________________________,
(hereinafter called "Owners") and Chevron Transport Corporation (hereinafter
called "Charterers").
WITNESSETH AND IT IS HEREBY AGREED as follows:
1. Vessel to be Chartered
Owners hereby let and demise and Charterers hereby hire the m.t.
_________ (hereinafter called the "Vessel"), Official No. _______, of about
___ gross tons and ___ deadweight tons, built in 199_ in _____), together with
all her engines, boilers, machinery, masts, anchors, cables, rigging, tackle,
apparel, furniture, electronics, small boats, and all her other appurtenances,
whether aboard or removed from the Vessel, together with any and all additions,
improvements and/or replacements which may hereafter be made to, on or in the
Vessel.
2. Period of Charter
(a) This Charter shall be for a period of twenty (20) years from
the Commencement Date. Charterers shall have the option of terminating this
Charter on an Optional Termination Date. Charterers shall give Owners (i)
non-binding notice of their intent to exercise such option, determined on a
good faith basis, at least 12 months prior to such Optional Termination Date
and (ii) irrevocable notice of such exercise 9 months prior to such Optional
Termination Date, if such Optional Termination Date is the first of the
Optional Termination Dates, or 7 months prior to such Optional Termination
Date, if such Optional Termination Date is subsequent to the first such
Optional Termination Date, and shall pay the applicable Optional Termination
Amount on or prior to such Optional Termination Date.
(b) Should the Vessel be upon a voyage otherwise than under
requisition for hire at the time when the charter of the Vessel would (but for
the provisions of this clause) have terminated, the Charter Period shall be
extended for such additional time as may be necessary for the completion of
such voyage. The Charter Period shall also be extended for such additional
time as may be necessary to bring the Vessel to a port of redelivery as
hereinafter provided in Clause 8 hereof. During any such extension, hire
shall be paid pro-rata on a daily basis (assuming a 365-day year) at the rate
in force before the commencement of such extension.
3. Time and Place of Delivery
(a) On the Commencement Date, Charterers shall unconditionally
accept delivery of the Vessel under this Charter simultaneously with delivery
to and acceptance of the Vessel by Owners under the Purchase Agreement "as is,
where is", in whatsoever condition the Vessel may be at the time of such
delivery. Owners shall have no obligation whatsoever to deliver the Vessel to
Charterers except upon the simultaneous delivery and acceptance referred to
above. Such simultaneous delivery and acceptance shall take place at the
location specified for delivery in the Purchase Agreement and are referred to
herein as "Delivery of the Vessel". On Delivery of the Vessel, Charterers
shall execute and deliver to Owners a Certificate of Acceptance.
(b) OWNERS MAKE NO REPRESENTATION, WARRANTY OR GUARANTEE, OF ANY
KIND EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE AS TO THE TITLE,
SEAWORTHINESS, CONDITION, VALUE, EQUIPMENT DESIGN, OPERATION, MERCHANTABILITY
OR FITNESS FOR USE OF THE VESSEL FOR ANY PARTICULAR PURPOSE OR AS TO THE
ELIGIBILITY OF THE VESSEL FOR ANY PARTICULAR TRADE OR ANY OTHER
REPRESENTATION, WARRANTY OR GUARANTEE WITH RESPECT TO THE VESSEL AND NONE
SHALL BE IMPLIED FROM THIS CHARTER; PROVIDED, HOWEVER, THAT OWNERS WARRANT
THAT OWNERS HAVE AND SHALL RETAIN WHATEVER TITLE TO THE VESSEL THAT OWNERS
RECEIVE FROM CHARTERERS SUBJECT ONLY TO THE MORTGAGE, THIS CHARTER AND LIENS
AND ENCUMBRANCES WHICH CHARTERERS ARE OBLIGATED TO DISCHARGE OR SATISFY.
CHARTERERS HEREBY WAIVE AS AGAINST OWNERS AND THE VESSEL, ALL REMEDIES,
WARRANTIES NOT EXPRESSED IN SUBCLAUSE (b) OF THIS CLAUSE 3 OR LIABILITIES,
EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE WITH RESPECT TO OWNERS' TITLE
THERETO OR THE PHYSICAL CONDITION OF THE VESSEL INCLUDING, BUT NOT LIMITED TO
(i) ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, (ii) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE
OF DEALING OR USAGE OF TRADE, (ii) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR
REMEDY IN TORT, WHETHER OR NOT ARISING FROM OWNERS' NEGLIGENCE, ACTUAL OR
IMPUTED, OR WHETHER OR NOT FOUNDED IN STRICT LIABILITY IN TORT AND (iv) ANY
OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OR DAMAGE TO THE
VESSEL. The acceptance by Charterers of the Vessel under this Charter shall
constitute conclusive proof, as between Owners and Charterers, that the Vessel
is seaworthy, and otherwise in the condition required by this Charter, in good
working order and repair and without defect or inherent defect in title,
seaworthiness, condition, design, operation or fitness for use, whether or not
discoverable by Charterers as of the date of such tender, and generally in all
respects satisfactory to Charterers.
(c) Charterers warrant that upon Delivery of the Vessel to them
the Vessel shall be in Charterers' custody and under its control.
4. Charterers' right in respect of the Vessel
Owners hereby assign to Charterers, for the duration of the
Charter Period, except during periods when an Event of Default shall have
occurred and be continuing and except in respect of a Total Loss (unless
Charterers shall have made all payments required by Clause 12 hereof in
respect of a Total Loss) without representation, warranty or covenant of any
kind, effective upon delivery of the Vessel to Charterers, the right to
enforce and exercise all rights of warranty, guaranty and indemnity which
Owners may have in respect of the Vessel or otherwise directly against the
Builder or any manufacturer of any part of the Vessel. Charterers shall be
entitled to take such action in the name of Owners against the Builder or any
manufacturer of any part of the Vessel in relation to the terms of purchase
of, the condition of or any patent infringement or alleged patent infringement
in relation to the Vessel or any part thereof as Charterers see fit but
subject to Owners being indemnified and secured to its satisfaction by
Charterers against all losses, costs damages and expenses thereby incurred or
to be incurred. If as a result of any such action any moneys are received
from the Builder or any such other manufacturer of the Vessel as aforesaid the
same shall be received by Charterers. Charterers shall use diligence to
assert and enforce all such rights which have a material effect upon the value
of the Vessel.
5. Use and Trade of Vessel
(a) Charterers shall have full use of the Vessel and may employ
the Vessel worldwide (within Institute Warranty Limits) in the carriage of
suitable lawful merchandise. In no event shall Charterers carry on board the
Vessel nuclear fuels or radioactive products; provided, however, with the
prior written consent of Owners, Charterers may carry on board the Vessel
radioisotopes used or intended to be used for any industrial, agricultural,
medical or scientific purposes.
(b) Charterers undertake not to employ the Vessel or suffer the
Vessel to be employed otherwise than in conformity with the terms of the
instruments of insurance (including any warranties expressed or implied
therein) without first obtaining the consent to such employment from their
insurers, protection and indemnity clubs and underwriters and complying with
such requirements as to extra premium or otherwise as the insurers may
prescribe.
(c) Charterers also undertake not to employ the Vessel or suffer
her employment in any trade or business which is forbidden by the law of any
country to which the Vessel may sail or is otherwise illicit or in carrying
illicit or prohibited goods.
(d) As to those trades in which the Vessel is employed,
Charterers shall comply with any and all requirements regarding financial
responsibility or security in respect of oil or other pollution damage as
required by any government, any state or other political subdivision thereof,
or any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government and any other
governmental entity with authority over Owners or Charterers, as the case may
be, or ownership, use and operation of the Vessel (whether or not such
requirement has been lawfully imposed or not) to enable the Vessel, without
penalty or charges, lawfully to enter, remain at, or leave any port, place,
territorial or contiguous waters of any country, state or municipality in
performance of this Charter without delay. Charterers shall make and maintain
all arrangements for security bond or otherwise as may be necessary to satisfy
such requirements at Charterers' sole liability and expense and Charterers
shall indemnify Owners against any and all losses, damages, claims, expenses
or liabilities incurred by reason of Charterers failure to comply with this
Clause 5(d).
(e) Charterers shall enter and maintain the Vessel under the
TOVALOP Scheme or under any similar compulsory schedule during the Charter
Period.
6. Documentation and House Flag
(a) Charterers agree that it shall, throughout the Charter
Period, maintain the documentation of the Vessel under the laws of the
Registration Jurisdiction at Owners' cost and expense; provided, however, in
the event that the costs and expenses of maintaining such documentation are in
excess of $_____________, then Charterers shall either (i) pay all amounts in
excess of $_______________ or (ii) cooperate with the Owner to change the
registry or port of documentation of the Vessel. Owners agree to do all such
things whatsoever and execute and deliver all such documents whatsoever to
enable Charterers to maintain such documentation. Charterers will not change
the registry or port of documentation of the Vessel without the prior written
consent of Owners which consent shall not be unreasonably withheld, or do or
suffer or permit to be done anything which will injuriously affect the
documentation of the Vessel as a vessel documented under the laws and
regulations of the Registration Jurisdiction. If Charterers change the
registry or port of documentation of the Vessel, Charterers shall, at time of
redelivery, if Owners so request and at Charterers' expense, change the
registry and port of documentation back to that of the Registration
Jurisdiction.
(b) Charterers shall have the right to re-name the Vessel, to
paint the Vessel in their own colors, install and display their funnel
insignia and fly their own house flag.
7. Maintenance and Operation
(a) Except as provided in Clause 20, the Vessel shall during the
Charter Period be in the full possession and at the absolute disposal for all
purposes of Charterers and under their complete control in every respect.
Charterers hereby covenant and agree with Owners that during the Charter
Period (and subject to the provisions of Clause 13):
(i) Charterers will at their expense maintain the Vessel,
her machinery, cargo handling equipment, boilers,
appurtenances and spare parts in a good state of
repair and in efficient operating condition in
accordance with good commercial maintenance practice
commensurate with other vessels in Charterers' fleet
of similar size and trade, ordinary wear and tear
excepted; and
(ii) Charterers will at their expense keep the Vessel with
unexpired classification in accordance with the
highest classification of the American Bureau of
Shipping (or such other classification society as
shall previously have been approved in writing by
Owners) and other required certificates in force and
shall make any improvement or structural changes or
acquire any new equipment necessary to comply with the
requirements of such classification; and
(iii) Charterers shall be at liberty to fit any additional
equipment required for the services of Charterers,
beyond that on board at the commencement of this
Charter, such work to be done at Charterers' expense
and on their time, and such equipment may be removed by
Charterers at their cost and on their time at any time
(provided, however, that such removal does not
adversely affect the class or seaworthiness of the
Vessel) prior to the expiration or any other
termination of the Charter. The Vessel is to be
redelivered to Owners in the same condition and class
as that in which she is delivered by Owner, ordinary
wear and tear excepted and any additional equipment
that cannot be or is not so removed shall become the
property of Owners; and
(iv) Charterers shall not permit the Vessel to proceed to
any port which is then subject to a prohibition by the
government of the Registration Jurisdiction or the
national government of the port in question; and
(v) in the event of hostilities in any part of the world
(whether war be declared or not) Charterers will not
employ the Vessel nor suggest her employment in
carrying any goods which are declared contraband nor
suffer her to enter or trade to any zone which is
declared a War Zone by the War Risks Insurers unless
Charterers have made arrangements with the said
insurers for the payment of such additional premiums
as said insurers may require to maintain the relevant
insurances in force or in any zone in respect of which
the War Risks Insurers have withdrawn cover for the
Vessel; and
(vi) Charterers will not use the Vessel in any manner or
for any purpose excepted from any insurance policy or
policies taken out in compliance with Clause 11 hereof
or for the purpose of carriage of goods of any
description excepted from the said insurance policy
or policies and shall not do or permit to be done
anything which could reasonably be expected to
invalidate any of the said insurance policy or
policies; and
(vii) Charterers will not use the Vessel in any manner or
for any purpose or trade or permit or suffer to be
done any act which will prejudice Owners' ownership of
the Vessel or any part thereof.
(b) During the Charter Period, Charterers shall at their own
expense or by their own procurement man, victual, navigate, operate, supply,
fuel and repair the Vessel whenever required and shall, as between themselves
and Owners, be responsible for all charges and expenses of every kind and
nature whatsoever incidental to their use and operation of the Vessel under
this Charter, including any foreign, general, municipal, value added or other
taxes except that Charterers shall not be responsible for Owners'
documentation costs under clause 6(a) or for Owner Taxes. During the Charter
Period, the master, officers and crew of the Vessel shall be engaged and
employed by Charterers and shall remain Charterers' servants, navigating,
managing and working the Vessel on behalf of and at the risk of Charterers.
(c) As between themselves and Owners, Charterers shall also be
responsible for any charges and expenses incidental to the use and operation
of the Vessel while under requisition for hire, during the Charter Period.
The foregoing provision of this sub-clause shall be without prejudice to the
rights of Owners and Charterers against other parties in respect of any such
charges or expenses. Charterers shall, subject to the prior written approval
of Owners (such approval not to be unreasonably withheld), be entitled to take
action in the name of Owners against other parties in respect of such charges
or expenses. If as a result of any such action any moneys are received the
same shall be recovered by Charterers.
(d) Charterers shall make no changes in the structure of the
Vessel nor major changes in her machinery, appurtenances, spareparts or
boilers without in each instance first securing the written approval of
Owners, which approval shall not be unreasonably withheld. Provided that if
any such changes are required to meet classification society requirements,
applicable regulations and/or any relevant laws Owners shall not withhold such
approval and Charterers shall not be obliged to reinstate the Vessel to its
condition prior to the making of such changes.
(e) Charterers shall drydock the Vessel and clean and paint her
underwater parts in accordance with good commercial practice, but not less
than as may be required by the American Bureau of Shipping or such other
classification society as provided in 7(a)(ii) to maintain the Vessel's
highest classification. Charterers shall give Owners not less than seven (7)
days prior notice of their intention to drydock the Vessel, such notice to
specify the intended time and place of drydocking.
(f) Owners (or such persons as they shall appoint or authorize)
shall have the right at any time on reasonable notice, and in a manner which
shall not interfere with the Vessel's trading requirements to inspect or
survey the Vessel in order to ascertain the condition of the Vessel and to
satisfy themselves that the Vessel is being properly repaired and maintained
in accordance with the provisions of this Charter. Inspection or survey in
drydock shall be made only when the Vessel is in drydock under the provisions
of sub-clause (e) of this Clause. However, Owners shall have the right to
require the Vessel to be drydocked for inspection, if Charterers are not
docking her at the required classification intervals. The costs incurred in
respect of such drydocking and any inspection or survey made under this
sub-clause shall be paid by Charterers to Owners. All repairs as shall be
shown to be required by any inspection or survey shall be made at Charterers'
expense and shall be completed within a reasonable period of time or such
other period as is specified by the relevant classification society referred
to in Clause 7(a)(ii). Time taken in respect of inspection, survey or repairs
shall form part of the Charter Period. Charterers shall whenever requested,
on reasonable notice, permit Owners to inspect the Vessel's log books and
furnish Owners promptly with full information regarding any casualties or
other damage to the Vessel.
(g) Owners shall not be liable for any expense in repairing or
maintaining the Vessel or be liable to supply a vessel or any part thereof in
lieu if the Vessel or any part thereof is lost, damaged, rendered unfit for
use, confiscated, seized, requisitioned, restrained or appropriated and the
Charter Hire payable in respect of the Vessel shall continue to be payable
notwithstanding loss or damage (not amounting to a Total Loss) to the Vessel
or any part thereof (and notwithstanding that the Vessel or any part thereof
is rendered unfit for use or is requisitioned for hire). In the event of a
Total Loss the provisions of Clause 12 shall apply;
(h) Charterers shall not have or be deemed to have any authority
to pledge Owners' credit for any purpose, including any maintenance overhauls,
replacements, repairs and modification of the Vessel.
8. Redelivery and Status
(a) Unless the Vessel suffers a Total Loss or Charterers
purchase the Vessel pursuant to Clause 22, Charterers shall at the end of the
Charter Period redeliver the Vessel to Owners at a safe and ice-free port or a
place selected by Charterers within the Vessel's trading limits (within 10
steaming days from a recognized loading area) or at such other safe port as
shall be agreed between the parties but Charterers shall not be deemed to
warrant the safety of such port once redelivery has occurred. The Vessel shall
be redelivered to Owners free and clear of all mortgages, liens, claims,
charges and encumbrances which Charterers are obligated to discharge or
satisfy and in the same or as good structure, state and condition as those in
which she was delivered, ordinary wear and tear alone excepted. The time of
redelivery shall be the time when the Vessel is tendered for redelivery in
class without outstanding requirements or recommendations to enable the Vessel
to proceed without delay and free of cargo (other than slops).
(b) At or about the time of redelivery a survey shall, if Owners
so require, be made to determine the condition and fitness of the Vessel, her
machinery and equipment. In that event, Charterers and Owners shall each
appoint surveyors to be present at such survey and the surveyors present shall
determine and state the repairs or work necessary to place the Vessel at the
date of redelivery in the structure, state and condition required by
sub-clause (a) of this Clause. In the event that the Vessel has been
dry-docked within 30 months prior to redelivery and Charterers certify in
writing to Owners that, to the best of their knowledge, the Vessel has had no
bottom touching since such dry-docking, such survey may be conducted while the
Vessel is afloat. Owners may require a diver's survey of the Vessel.
Charterers shall bear all expenses of any such survey. Charterers shall at
their expense make all such repairs and do all such work so found to be
necessary before redelivery or at Owners' option shall discharge their
obligations hereunder by payment to Owners of a sum sufficient to provide, at
the prices current at the time of redelivery, for the work and repairs
necessary to place the Vessel in such structure, state and condition. The
Charter Period shall be extended until the completion of any such repairs and
work found to be necessary or the payment of the amounts described in this
Clause 8(b).
(c) The provisions of this Clause shall be subject to the
provisions of sub-clause (b) of Clause 13 hereof where the Vessel is under
requisition for hire at or until the end of the Charter Period.
(d) An inventory of consumable stores on board the Vessel shall
be made by Charterers in conjunction with Owners on delivery and again on
redelivery of the Vessel. Charterers and Owners shall respectively take over
and pay for all bunkers, lubricating oil, water and unbroached provisions,
paints, oils, ropes and other consumable stores remaining in the Vessel on
delivery and redelivery at the market prices current at the port of delivery
or redelivery but Charterers shall not be required to pay for lubricating oil
in the Vessel's system or for stores included in the Vessel's specification or
for stores arranged and put on board by Charterers' at their own expense or by
the Builder at its own expense.
(e) The Vessel upon redelivery shall have her survey cycles up
to date and class certificates valid for at least six (6) calendar months.
Notwithstanding the provisions of this Clause 8, Charterers shall ensure that
Vessel shall have been dry-docked within 30 months prior to redelivery.
9. Use of Vessel and Payment of Hire
(a) Charterers shall have the use of all equipment (which
expression includes cabin, crew and galley equipment, navigational aids and
technical equipment, furnishings, furniture and fittings and spare and
replacement parts) that is the property of Owners on board at the time of
Delivery of the Vessel or title to which is acquired by Owners pursuant to the
Purchase Agreement; and the same, or their substantial equivalent, shall be
returned to Owners on redelivery in good order and condition, ordinary wear
and tear alone excepted. Charterers shall from time to time during the
Charter Period replace at their expense such items of equipment as shall be so
damaged or worn as to be unfit for use. Such replaced equipment shall become
part of the Vessel and title to such replaced equipment shall vest in and the
same shall belong to Owners.
(b) Any hired equipment placed on the Vessel by Charterers may
be removed by Charterers prior to the expiration of the Charter Period. If so
requested by Owners, Charterers shall assist in transfer of equipment hire
agreements to Owners or their nominee, but Charterers shall not be required to
guarantee or assume any other liability with respect to a transferee's
performance under said hire agreements.
(c) During the Charter Period, the Charterer shall pay, without
offset or deduction, whether or not Vessel is under arrest, Charter Hire for
the use and hire of the Vessel at the times and in the amounts indicated on
Schedule 1 attached hereto and made a part hereof. Unless otherwise notified
by Owners, all payments of Charter Hire and other amounts payable by
Charterers to Owners hereunder shall be made to an account nominated by Owners
at _________________ (or to such other account as Owners may from time to time
nominate) and shall be made by wire transfer of immediately available funds.
(d) During any extension of the Charter Period, the rate of hire
shall be calculated on the basis of the then current Charter Hire rate
converted to a daily rate using a 365 days year.
(e) Time of payment shall be of the essence. If the date of
payment is a date upon which Owners' nominated bank is not open for business,
payment shall be made on the first preceding Business Day. Payment of sums
due under the provisions of this Charter shall be made (by close of business
New York Federal Reserve Bank) by wire transfer to Owners' nominated bank and
receipt of such wire transfer by such bank by 10:00 a.m. New York time on the
due date for payment (in accordance with all the provisions of this Charter)
shall constitute timely payment by the payer of the amount authorized by such
cable or telex to be paid even though the payee's account be not credited
until after such due date and the payer shall not be liable for any delays or
errors committed by such bank in processing payment instructions transmitted
properly on behalf of the Charterers.
(f) If any payment of Charter Hire hereunder shall not be paid
when due Owners shall be entitled in addition to call for interest thereon at
the rate of interest per annum equal to the Default Rate from and including
the due date to the date of actual payment (after as well as before judgment)
parts of a day being treated as complete days and Charterers shall thereupon
forthwith pay the same to Owners.
10. Mortgage
(a) Charterers agree that the financing of the Vessel will be
secured by the Charter on the Vessel and assignments of Owners' right, title
and interest under, in and to this Charter. Charterers shall execute and
deliver all such documents, opinions, reports, and agreements listed on
Exhibit A attached hereto.
(b) Charterers agree that this Charter and any other charters
permitted under Clause 20(a) hereof shall always be subordinated in all
respects to the Mortgage.
(c) Owners agree that the Mortgage and any other mortgage
hereinafter placed on the Vessel by Owners will contain a provision to the
effect that throughout the Charter Period, so long as no Event of Default
shall have occurred and be continuing and so long as Charterers shall have
performed their obligations hereunder, Charterers shall be entitled to quiet
enjoyment of the Vessel.
11. Insurance
(a) Insurance Obligations - Charterer shall, at its own expense,
provide and maintain the following insurance and shall
ensure that the value of the Vessel as stated in any valued
policy is equal to the amount insured thereunder:
(i) hull and machinery insurance for an amount not less
than the Stipulated Loss Value of the vessel as per
American Institute Hull Clauses (June 2, 1977) and the
American Hull Insurance Syndicate's Liner Negligence
Clause (June 2, 1977). Such insurance shall include
navigation limit adequate for the vessel's trade and
exclude collision liability.
(ii) protection & indemnity insurance on a full entry basis
with an International Group P&I Club. Such insurance
shall include, but not be limited to, coverage for
injuries to or death of masters, mates and crew; full
(4/4ths) collision liabilities and pollution
liabilities imposed by federal and state laws as well
as TOVALOP liabilities (if applicable). Such
insurance shall be unlimited as per International
Group P&I Club rules except for pollution liabilities
which shall be limited to $700 million or the maximum
pollution limit offered by and through the P&I Clubs
of the International Group.
(iii) Hull War Risk Insurance for an amount not less than
the Stipulated Loss Value of the vessel as per
American Institute Hull War Risks and Strikes Clauses
12/1/77 and the American Hull Insurance Syndicate's
Addendum April 1, 1984 (War Risks). Such insurance
shall apply to all areas where the vessel trades.
(b) Insurance Practice
Charterers have, prior to the signing of this Charter, outlined to
Owners the insurance arrangements at present in force in relation to its fleet
(which arrangements shall apply to the Vessel on and after the date of
delivery of the Vessel). Owners hereby confirm their acceptance of such
arrangements as complying with Charterers' obligations under the preceding
sub-clause (a) (subject to adjustment thereof in the light of changes in
market practice and in accepted tanker practice). Charterers undertake not to
alter such arrangements in a manner that is in material breach of any other
provision of this Charter or otherwise materially adverse to Owners without
first notifying Owners and obtaining their written approval, such approval not
to be unreasonably withheld.
(c) Loss payable and notice of Cancellation
(i) Unless Owners shall have given their prior written
consent, all insurances effected pursuant to Clause
11(a)(i) and (iii) shall contain a loss payable and
notice of cancellation clause in the following form:
"LOSS PAYABLE AND NOTICE OF CANCELLATION CLAUSE"
(A) Until ________________________________ ("Owners")
shall have notified underwriters to the contrary:
(1) all recoveries up to the Stipulated Loss
Value hereunder in respect of a total loss
or constructive or compromised or agreed
or arranged total loss shall be paid in
full to Owners without any deduction or
deductions whatsoever; and
(2) all other recoveries shall be paid in full
to Chevron Transport Corporation
("Charterers") or to its order without any
deduction or deductions whatsoever; and
(B) Owners shall be advised:
(1) if any Hull and Machinery insurer cancels
or gives notice of cancellation of any
insurance or entry at least ten (10) days
before such cancellation is to take
effect; and
(2) if any hull War Risks insurer cancels or
gives notice of cancellation of any
insurance or entry at least seven (7) days
before such cancellation is to take
effect; and
(3) of any default in the payment of any Hull
and Machinery premium or call or failure
to renew any such insurance or entry ten
(10) days prior to the date of renewal
thereof; and
(4) of any default in the payment of any War
Risks premium or call or failure to renew
any such entry seven (7) days prior to the
date of renewal thereof."
(ii) Unless Owners shall have given their prior written
consent, all insurance and entries effected pursuant
to Clause 11(a)(ii) shall contain a loss payable and
notice of cancellation clause in the following form:
"LOSS PAYABLE AND NOTICE OF CANCELLATION CLAUSE
At the request of the Owners and with the consent of
the Charterers, the protection and indemnity club
managers may in their discretion, agree:
(a) to pay Owners, or to their order, any recovery
the Charterers are entitled to receive from the
funds of the P&I Club in respect of any
liability, costs or expenses incurred by the
Charterers on receipt of notice from the Owners
that the Charterers are in default under the
Charter; and
(b) to give the Owners ten (10) days' notice that
insurance in the P&I Club in respect of the
Vessel is to cease; and
(c) to give the Owners ten (10) days' notice of the
P&I Club's intention to cancel the insurance of
the Charterers by reason of their failure to pay
when due and demanded any sum due from them to
the P&I Club.
(d) Information as to insurances
Charterers shall give Owners and its insurance advisers such
information as to the insurances taken out or being or to be taken out in
compliance with Charterers' obligations under the foregoing provisions of this
Clause or as to any other matter which may be relevant to such insurances as
Owners or their advisers may reasonably request.
(e) Charterers Option to Self-Insure
Notwithstanding anything to the contrary herein contained in
Clause 11, Charterers shall have the right to self-insure against the risks
described in Clause 11(a).
12. Total Loss, Requisition for Title, Capture, Seizure
(a) If a Total Loss shall occur, this Charter and the obligation
of Charterers to pay Charter Hire hereunder shall continue and be payable as
set forth herein until Charterers have complied with this Clause 12.
Charterers shall forthwith notify Owners of the facts and circumstances of
such Total Loss and Charterers shall, on the date which is 90 days after the
Total Loss (the "Loss Date"), pay to Owners the amount determined pursuant to
paragraph (b) below. Charterers shall give Owners at least 15 days prior
notice in writing of the Loss Date. On the Loss Date, Charterers shall pay
such amount to Owners, and thereupon this Charter shall terminate and Charter
Hire payable hereunder shall cease.
(b) The amount payable on any such Loss Date shall be the sum of
(i) any deficiency between (A) the Stipulated Loss Value in relation to the
period in question calculated by the application of Schedule 2 and (B) all
insurance proceeds for damage to or loss of the Vessel and amounts paid by any
governmental authority in connection with any requisition, seizure or
forfeiture actually received in hand by Owners or the Mortgagee prior to or on
such Loss Date; and (ii) all Charter Hire accrued (on a daily basis) but
unpaid hereunder to such Loss Date and any other sums due under any provisions
of this Charter, together with interest thereon at the Default Rate from the
date upon which any such Charter Hire or other sums was due until the date
upon which the calculations are made for the purposes of this Clause which
date shall be the Loss Date. The foregoing obligations of Charterers under
this Clause 12 shall apply regardless of whether or not any moneys are payable
under the insurances effected in compliance with Clause 11 hereof in respect
of the Vessel, regardless also of the amount payable thereunder, regardless
also of the cause of the Total Loss and, regardless of whether or not any of
the said compensation shall be payable. This Charter shall terminate upon the
fulfillment by Charterers of their obligations under this subclause.
(c) If Charterers shall have made a payment to Owners pursuant
to the foregoing provisions of sub-clause (b) of this Clause and Owners shall
subsequently receive any insurance monies or other compensation contemplated
under such Clause (b) the same shall be immediately applied first towards
repayment to Charterers of the amount of any such payment and second (to the
extent that the further insurance monies or compensation shall exceed the
amounts paid by Charterers and so repaid by Owners) to Charterers.
(d) Charterers shall be liable for any loss of any part of or
damage to the Vessel (other than a Total Loss in which event the foregoing
provisions of this clause shall apply) during the Charter Period from
whatsoever cause such loss or damage may arise, unless the same shall have
been caused by the negligence or wilful act of Owners, their servants or
agents (except where Charterers or their servants and agents are acting as
agents of Owners). In the event of repairable damage to the Vessel or any part
thereof or loss of part of the Vessel, Owners shall, subject to their prior
right to retain any sums which may be due from Charterers to Owners under the
terms of this Charter, make payment to Charterers of moneys received under the
insurances effected in compliance with Clause 11 upon Charterers furnishing
evidence satisfactory to Owners that all such damage has been made good or
repaired or repairs have been put in hand.
(e) For the purpose of this Clause 12, insurers shall be deemed
to have admitted a claim either on the date that they inform Owners that the
claim is admitted or upon the date that they make payment to Owners even
though no claim has ever been admitted.
(f) Owners shall, upon the request of Charterers, promptly
execute such documents as may be required to enable Charterers to abandon the
Vessel to insurers and claim a constructive total loss provided that Owners
shall be entitled by notice in writing to Charterers to require that the
Vessel shall not be abandoned and that a partial loss only shall be claimed,
in which case this Charter shall terminate as from the date of the event
giving rise to such loss and any insurance payments in respect of the partial
loss shall be paid to Owners. Save as aforesaid, any moneys payable by
insurers for a partial loss shall be paid to Charterers and Owners shall, at
the request and expense of Charterers, take or procure to be taken all such
reasonable steps as Charterers may require for the recovery of such moneys.
13. Requisition for Hire.
(a) If the Vessel is requisitioned for hire by any governmental
or other competent authority during the Charter Period, then unless and until
following such requisition the Vessel becomes a Total Loss, this Charter shall
continue in full force and effect for the remainder of the Charter Period (and
Charterers shall be fully responsible for due compliance with all its
obligations under (i) Clause 11 and (ii) the other provisions of this Charter,
other than those which Charterers are unable to comply with solely by virtue
of the aforesaid requisition for hire); provided, however, that if Charterers
shall duly comply with all of their obligations under this Charter save as
aforesaid, Charterers shall be entitled to all requisition hire paid to Owners
or to Charterers by such governmental or other competent authority or by any
person acting by the authority of the same on account of such requisition
during the Charter Period.
(b) Should the Vessel be under requisition for hire at or until
the end of the Charter Period:
(i) Charterers shall, if they are prevented by reason of
the requisition from redelivering the Vessel under
sub-clause (a) of Clause 8 hereof, be relieved from
their obligation so to do, provided that if the party
requisitioning the Vessel does not at the end of the
period of requisition redeliver the Vessel to Owners
at such place as Owners shall request, Charterers
shall upon the written request of Owners use their
best endeavors to redeliver the Vessel in accordance
with sub-clause (a) of Clause 8;
(ii) after such release Charterers shall be given a
reasonable opportunity of removing any such additional
or hired equipment as is referred to in sub-clause (b)
of Clause 9 hereof on the terms referred to in that
sub-clause;
(iii) notwithstanding any other provision of this Charter,
Charterers shall be under no liability to Owners in
respect of the structure, state or condition of the
Vessel insofar as such structure, state or condition
is due to the manner in which she has been used or
treated or to any events which have occurred during
the period of such requisition.
14. Liens; Notice on Vessel
(a) Charterers will not suffer, nor permit to be continued, any
lien or encumbrance incurred by them or their agents, which might have
priority over the title and interest of Owners in the Vessel. Charterers
shall indemnify and hold Owners harmless against any lien of whatsoever nature
arising upon the Vessel during the Charter Period while she is under the
control of Charterers, and against any claims against Owners arising out of or
in relation to the operation of the Vessel by Charterers. Should the Vessel
be arrested by reason of claims or liens arising out of her operation
hereunder by Charterers, Charterers shall at their own expense take all
reasonable steps to secure that within a reasonable time the Vessel is
released and at their own expense put up bail to secure release of the Vessel.
(b) Charterers will fasten to the Vessel in a conspicuous place
and will keep so fastened during the Charter Period a notice reading as
follows:
"This Vessel is the property of and is registered in the name of
__________________________; she is under charter by demise to and
operated by ______________________________ and neither Charterers
nor the Master nor any servant or agent thereof has any authority
whatsoever to contract on behalf of Owners or to pledge Owners'
credit or to involve Owners in any liability whatsoever"
or in such other form as Owners may reasonably require from time
to time.
15. Salvage
All salvage and all proceeds from derelicts shall be for
Charterers' benefit and the cost of repairing damage occasioned thereby shall
be borne by Charterers.
16. General Average
General Average, including Owners' portion, if any, shall be
payable by Charterers. General Average, if any, shall be adjusted according
to the York-Antwerp Rules 1974, as amended 1990, or any subsequent
modification thereof current at the time of the casualty.
17. Default; Remedies
(a) If during the term of this Charter:
(i) Charterers shall make default for two Business Days in
any payment in respect of Charter Hire due under the
terms of this Charter.
(ii) Charterers shall fail for a period of thirty (30)
Business Days after written notice thereof has been
given to Charterers by Owners to perform and observe
any of the covenants, conditions, agreements or
stipulations on the part of Charterers to be performed
or observed contained herein (other than sub-clause
(a)(i) and (v) of this Clause).
(iii) Charterers cease doing business as a going concern or
generally ceases to pay their debts as they become due
or any proceedings under any bankruptcy or insolvency
laws are instituted against Charterers or if a
receiver or trustee is appointed for Charterers or for
any of their assets or properties, and such proceeding
is not dismissed, vacated or fully stayed within sixty
(60) days.
(iv) Charterers shall create or suffer to exist any
mortgage, charge, pledge or other like encumbrance
over the Vessel or any part thereof or shall have
abandoned the Vessel. The foregoing provisions shall
not apply to any notice of abandonment which
Charterer's may give to insurers under the provisions
of Clause 12.
(v) Charterers fail to comply with any of their
obligations as to insurance contained in Clause 11.
(vi) Charterers shall within thirty (30) days of any
scheduled date of redelivery hereunder fail to provide
adequate bail or security when required so to do in
respect of any maritime lien, possessory lien or
statutory right in rem which may be acquired over the
Vessel in order to prevent the Vessel being arrested,
impounded or seized or if any such lien, right or
claim over the Vessel is exercised by the arrest,
attachment, detention, impounding or seizure of the
Vessel under any distress execution or other process,
or any distress or execution is levied thereon, and
Charterers fail to use their best endeavors to procure
the release of the Vessel therefrom within thirty (30)
days of any scheduled date of redelivery hereunder.
THEN AND IN ANY SUCH EVENT Owners may, by written notice to
Charterers, declare this Charter to be in default and Owners may:
(a) (i) Upon written demand, cause Charterers at Charterers'
expense to, and Charterers shall promptly, redeliver the Vessel or
cause the Vessel to be redelivered, with all reasonable dispatch
to Owners and in the condition required by the terms of Clause 8
as if the Vessel were being redelivered at the expiration of the
Charter Period, and all obligations of Charterers under said
Clause 8 shall apply to such redelivery, or (ii) Owners or their
agent, at Owners' option, without further notice, may, but shall
be under no obligation to, retake the Vessel wherever found,
whether upon the high seas or in any port, harbor, or other place
and irrespective of whether Charterers, any subcharterer or any
other Person may be in possession of the Vessel, all without prior
demand and without legal process, and for that purpose Owners or
their agent may enter upon any dock, pier or other premises where
the Vessel may be and may take possession thereof, without Owners
or their agent incurring any liability by reason of such retaking,
whether for the restoration of damage to property caused by such
retaking or otherwise. The exercise by Owners of their remedies
under this subparagraph (a) shall be without prejudice, and in
addition, to any of Owners' other remedies referred to below.
(b) Owners or their agent may sell the Vessel at public or
private sale, with or without notice to Charterers, advertisement
or publication, as Owners may determine, or otherwise may dispose
of, hold, use, operate, charter (whether for a period greater or
less than the balance of what would have been the Charter Period
in the absence of the termination of Charterers' rights to the
Vessel) to others or keep the Vessel idle, all on such terms and
conditions and at such place or places as Owners may determine and
all free and clear of any rights of Charterers and of any claim of
Charterers in admiralty, in equity, at law or by statute, whether
for loss or damage or otherwise, and without any duty to account
to Charterers.
(c) Charterers shall be liable for any and all Charter Hire
payable under this Charter before, during or after the exercise of
any of the foregoing remedies and for all reasonable costs
including all legal fees and any other costs and expenses
whatsoever incurred by Owners by reason of the occurrence of any
default or by reason of the exercise by Owners of any remedy
hereunder, including, without limitation, all costs and expenses
incurred by Owners in connection with any retaking of the Vessel
and, upon the redelivery or retaking of the Vessel in accordance
with this Clause 17, the placing of the Vessel in the condition and
seaworthiness required by the terms of Clause 8 hereof and
including interest on overdue Charter Hire.
(d) Each and every right, power and remedy herein given to
Owners shall be cumulative and shall be in addition to every other
right, power and remedy herein given or now or hereafter existing
at law, in equity, admiralty or by statute and each and every
power and remedy whether herein given or otherwise existing may
be exercised from time to time and as often and in such order as
may be deemed expedient by Owners, and the exercise or the
beginning of the exercise of any right, power or remedy shall not
be construed to be a waiver of the right to exercise at the same
time or thereafter any other power or remedy. No delay or
omission of Owners to exercise any right or power vested in it
hereunder shall impair such right or power or be construed as a
waiver of or as acquiescence in any default by Owners or be deemed
a waiver of any right arising out of any future default or of any
past default. In the event Owners at any time agree to waive any
such right or power, such waiver shall be revocable by Owners at
any time and the right or power shall henceforth be again
exercisable as though there had been no such waiver unless the
Event of Default has been cured. In the event Owners shall have
proceeded to enforce any right or pursue any power under this
Charter and such proceedings shall have been discontinued or
abandoned for any reason, or shall have been determined adversely
to Owners, then and in every such case Charterers and Owners shall
be restored to their former positions and rights hereunder with
respect to the property subject or intended to be subject to this
Charter and all rights, remedies and powers of Owners shall
continue as if no such proceedings had been taken.
(e) The rights and powers of Owners and the obligations of
Charterers under this Clause 17 shall be effective and enforceable
regardless of the pendency of any proceeding which has or might
have the effect of preventing Owners or Charterers from complying
with the terms of this Charter. No express or implied waiver by
Owners of any default shall in any way be, or be construed to be a
waiver of any further or subsequent default.
18. Termination
In the event (a) the Charterers shall exercise the option granted
to them pursuant to Section 2(a) and Charterers shall have remitted to Owners
an amount equal to the Optional Termination Amount, (b) a Total Loss shall
have occurred and Charterers shall have remitted to Owners the amounts
described in Clause 12(b) or (c) Charterers shall have remitted to Owners the
amounts described in Clause 19, then, notwithstanding anything to the contrary
contained herein, the Charter shall continue with respect to Charterers'
obligation to pay such amount to Owners and shall terminate on (x) the date
which is 367 days after the date on which such amounts have been remitted to
Owners or the Owners' assignee or (y) if (i) Charterers commence a voluntary
case under any applicable bankruptcy, insolvency, or other similar law now or
hereafter in effect, (ii) a receiver, liquidator, assignee, custodian, trustee
or sequestrator (or other similar official) is appointed for Charterers or for
any substantial part of their property, (iii) Charterers generally fail to pay
their debts as they become due or (iv) Charterers make a general assignment
for the benefit of creditors, the expiration of the period during which any
payment made by or on behalf of Charterers may be avoided under any applicable
bankruptcy, insolvency, creditors' rights or similar laws.
19. Payments on Termination
Whether or not Owners shall have exercised, or shall thereafter at
any time exercise, any options, rights or remedies under Clause 17, upon or as
a consequence of a breach of contract by Charterers amounting to repudiation
by Charterers of this Charter, Owners may immediately require Charterers to
pay to Owners, and Charterers shall pay to Owners as liquidated damages for
loss of a bargain and not as a penalty, an amount equal to (i) the sum of (A)
the Stipulated Loss Value in relation to the period in question calculated by
the application of Schedule 2, (B) all outstanding accrued and unpaid Charter
Hire and (C) any other amounts due to Owners under this Charter on or prior to
the date of payment and (ii) interest thereon (as well after as before
judgment) at the Default Rate from the date such amounts were payable to the
actual date of payment.
Charterers shall not be entitled to any part of the net proceeds
of the Vessel (if any) whether by way of rebate of Charter Hire or otherwise.
20. Assignment and Sub Charter
(a) Charterers may not assign all or part of their rights and
obligations under this Charter nor may they charter the Vessel by demise to
any other entity without the prior written consent of Owners, such consent,
subject always to the Vessel being maintained and insured to the same
standards as are adopted by Charterers in respect of the vessels owned by
them, not to be unreasonably withheld; provided, however, that Charterers may
assign their rights and obligations hereunder to a corporation more than 50%
of which is owned, directly or indirectly, by Chevron Corporation so long as
Charterers remain responsible as principals for the due fulfillment of this
Charter and provide such assurances of responsibility to Owners as they may
reasonably request.
(b) Charterers may otherwise charter the Vessel without the
prior consent of Owners provided that Charterers remain responsible as
principals (or appoint another person to be responsible in their stead) for
navigating and managing the Vessel throughout the period of such charter and
for defraying all expenses in connection with the Vessel throughout such period
or substantially all such expenses other than those directly incidental to a
particular voyage or to the employment of the Vessel during that period.
(c) Owners may not transfer or assign to any other person or
entity all or part of its rights or obligations under this Charter (except to
the Lender pursuant to the Assignment of Charter and the reassignment of this
Charter to the Collateral Trustee under the Assignment of Assignment of
Charter (collectively, the Assignment of Charter and the Assignment of
Assignment of Charter shall be referred to as the "Security Assignment"))
unless such transferee or assignee also assumes the obligations of Owners
under the related Security Documents and Charterers shall have given its prior
written consent to such assignment and assumption, which consent shall not be
unreasonably withheld. In addition, any transfer of Owners' interest in this
Charter (other than the Security Assignment) may only be effected by surrender
of this Charter and its reissuance by Charterers to such Owners' assignee or
transferee.
21. Indemnity
(a) Charterers hereby indemnify Owners and shall keep Owners
fully indemnified at all times whether during the currency
of this Charter or at any time in respect of events arising
during the currency of this Charter against:
(i) All costs and expenses of operating and maintaining
the Vessel and of operating, maintaining and replacing
all parts including (but without prejudice to the
generality of the foregoing) all fuel, oil, port
charges, fees, taxes, levies, fines, penalties,
charges, insurance premiums, victualing, crew,
navigation, manning, operating and freight expenses
and all other outgoings whatsoever payable by Owners
or Charterers in respect of the possession or
operation of the Vessel or any part thereof, or the
purchase, ownership, delivery, chartering, possession
and operation, import to or export from any country,
return, sale or disposition of the Vessel or any part
thereof or upon the hire, receipts or earnings arising
therefrom (other than Owners Taxes or documentation
costs except as otherwise provided in Clause 6(a))
which shall be promptly paid by Charterers;
(ii) All liabilities, claims, proceedings (whether civil or
criminal), penalties, fines or other sanctions,
judgements, charges, taxes, impositions, liens,
salvage, general average, costs and expenses
whatsoever which may at any time be made or claimed by
Charterers or any employee, servant, agent or
sub-contractor, passenger, owner, shipper, consignee
and receiver of goods or any third party (including
governments or other authorities) or by their
respective dependents arising directly or indirectly
in any manner out of the design, construction,
possession, management, repair, certification,
manning, provisioning, supply or servicing of the
Vessel (whether at sea or not) or the chartering
thereof hereunder whether such liability, claims,
proceedings, penalties, fines, sanctions, judgments,
charges, taxes, impositions, liens, salvage, general
average, cost or expenses may be attributable to any
defect in the Vessel or the design, construction,
testing or use thereof or from any maintenance,
service, repair, overhaul or otherwise and regardless
of when or where the same shall arise and whether or
not the Vessel or the relevant part thereof is in the
possession or control of Charterers (other than Owners
Taxes or documentation costs except as otherwise
provided in Clause 6(a)); and
(iii) Charterers accept all liability for oil or other
pollution damage resulting from Charterers' operation
of the Vessel under this Charter and agree to promptly
indemnify and hold Owners harmless from and against
any and all losses, damages and expenses which Owners
may incur as a result of any oil or other pollution
damage resulting from Charterers' operation of the
Vessel under this Charter, including, but not limited
to, Owners' liability under the Oil Pollution Act of
1990, as amended, and/or the laws of any other
jurisdiction relating to oil spills.
(iv) Owners shall use good faith efforts to notify
Charterers promptly of any tax for which it may seek
indemnity. Charterers shall, subject to the prior
written approval of Owners (such approval not to be
unreasonably withheld), be entitled to take action in
the name of Owners at Charterers' expense against any
taxing authority in respect of any taxes for which
Charterers have indemnified such Owners, and Owners
agree to reasonably cooperate with Charterers in
taking such action. If as a result of any such action
any moneys are received that are attributable to such
indemnified taxes (including any interest thereon paid
by such taxing authority) the same shall be recovered
by Charterers.
(b) Without prejudice to its generality, the provisions of this
sub-clause shall extend to claims of persons (including governments or other
bodies whether corporate or otherwise) who have suffered or allege that they
have suffered loss, damage or injury in connection with any thing done or not
done by the Vessel, including in connection with any oil or other substance
emanating or threatening to emanate from the Vessel and shall extend to
levies, impositions, calls, or contributions on or required to be made by
Owners during or in respect of the Charter Period.
(c) If any obligation of Charterers under the foregoing
sub-clause or under subclause (d) below shall not be discharged when due,
Charterers shall on demand forthwith pay to Owners not only the amount of such
obligation but also interest thereon at the Default Rate from the date Owners
paid the same to the date of reimbursement by Charterers (after as well as
before judgment)
(d) In the event of the Vessel becoming a wreck or obstruction
to navigation, Charterers shall indemnify Owners against all losses, costs,
damages and expenses which Owners may in consequence thereof incur including
those incurred in respect of the removal or destruction of the wreck or
obstruction under statutory or other powers.
22. Purchase Option
(a) On ________, 2014, so long as this Charter has not earlier
terminated and no Event of Default has occurred and is continuing and all
payments due hereunder have been paid in full, Charterers shall have the right
to purchase the Vessel at a purchase price equal to $1.00. Charterers shall
give Owners at least 90 days prior written notice of its election to purchase
the Vessel on ________, 2014.
(b) Owners agree to do all such things whatsoever and execute
and deliver all such documents whatsoever to enable Charterers to register
title to the Vessel in the name of Charterers or its designee.
(c) Charterers shall pay all fees, taxes (other than Owner
Taxes), costs and expenses which may become payable as a result of or in
connection with this Clause 22.
23. General
(a) Charterers shall give to Owners all such information as
Owners may reasonably request with regard to the performance by Charterers of
their obligations hereunder.
(b) Charterers shall pay all expenses (including legal and other
costs) incurred by Owners in connection with the enforcement of any rights
conferred upon Owners by this Charter or in or incidental to any action
brought by Owners to recover any hire or other payments due hereunder or for
breach of any covenant, agreement, condition or stipulation herein contained
or to recover possession of the Vessel or any part thereof whether any such
action proceeds to judgment or not. Owners shall pay all expenses (including
legal and other costs) incurred by Charterers in connection with the
enforcement of any rights conferred upon Charterers against Owners by this
Charter.
(c) No failure or delay on the part of Owners in exercising any
power or right hereunder shall operate as a waiver thereof nor shall any
single or partial exercise of any such right or power preclude any other or
further exercise of any such right or power.
(d) This Charter shall not be varied in its terms by an oral
agreement or representation or otherwise than by an instrument in writing of
even date herewith or subsequent hereto executed by all the parties hereto or
by their duly authorized representatives.
(e) If any term or provision of this Charter or the application
thereof to any person or circumstance shall to any extent be invalid or
unenforceable, the remainder of this Charter 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 Charter shall be valid and be enforceable to the fullest
extent permitted by law.
(f) The title to the Clauses and sub-clauses of this Charter
shall not in any way affect the interpretation thereof; the terms defined in
this Charter have the meanings assigned to them in this Charter and include
the plural as well as the singular, and the use of any gender herein shall be
deemed to include the other gender.
(g) Any demand, consent, record, election or notice required or
permitted to be given under this Charter shall be in writing and sent by
recorded or registered letter or telefax (and in the case of telefax confirmed
by recorded or registered letter) addressed as follows:
(i) If to Owners to:
United House
14-16 Nelson Street
Douglas, Isle of Man
Fax No: ________________________
Attention:______________________
(ii) If to Charterers to:
Chevron House
11 Church Street
Hamilton, Bermuda HM111
Fax No:_________________________
Attention:______________________
or in case to such other person or address or addresses or telefax number as
any party may notify in writing to the other parties hereto. Any such notice
shall be deemed to have reached the party to whom it is addressed (in the case
of notice given by letter) five (5) days after despatch by first class
pre-paid post (airmail if from abroad) or (in the case of notice given by
telefax) when confirmed by a correct transmission report when despatched and
for this purpose confirmation by letter of notice given by telefax, shall be
disregarded.
(h) This Charter shall be governed by and construed and
performance thereof shall be determined in accordance with the federal laws of
the United States of America and the laws of New York. The obligations,
rights and remedies of the parties hereunder shall be determined in accordance
with such laws, without giving effect to principles of conflicts of law.
(i) All matters of difference between the parties hereto (other
than as herein expressly provided to the contrary and other than in respect of
any action by Owners for possession of the Vessel) shall be referred to
arbitration in New York by an arbitrator to be agreed between Owners and
Charterers or in default of such agreement within 30 days to be nominated by
the President for the time being of the Society of Maritime Arbitrators.
(j) Where it is provided in this Charter that in default of
agreement a matter is to be determined by an expert under this sub-clause, the
same shall be determined by such person, firm, corporation or body as may be
agreed between Owners and Charterers (or in default of agreement as may be
nominated by the Chairman for the time being of the Baltic and Mercantile
Shipping Exchange) who shall be deemed to act as expert and not as arbitrator
and whose determination shall be final and binding on the parties.
(k) All payments (other than payments pursuant to Clauses
21(a)(i) and 21(a)(ii) and documentation costs for Owners' account pursuant to
Clause 6(a)) made to Owners shall be made without deduction for or on account
of any present or future taxes (including value added, turnover, sales and use
taxes), levies, imposts, duties, deduction, withholdings and other charges of
whatsoever nature (collectively, "Charges") unless such deduction is required
by law. If such deduction is required by law (i) the sum payable by
Charterers shall be increased as may be necessary so that, after making all
required withholdings and deductions (including those applicable to additional
sums payable under this Clause 23(k)), Owners shall receive an amount equal to
the sum that Owners would have received had no such withholdings and
deductions been made and (ii) as required by applicable law Charterers shall
withhold or deduct the amount required and pay such amount to the relevant
taxing or other governmental authority. If any Charges paid by Charterers are
recoverable by Owners from such taxing or other governmental authority,
Charterers shall be entitled to the same rights provided in Clause 21(a)(iv).
Owners shall consult with Charterers and use reasonable efforts to agree to a
method of avoiding or minimizing any such deduction that is not in breach of
applicable law or governmental regulation or of any of the financing documents
entered into with the Mortgagee and which will leave the parties in
substantially the same contractual relation as is herein contained. Without
limiting the generality of the foregoing, the Owners shall take any lawful
action to the extent necessary to prevent or avoid the imposition of any
taxes, including any withholding taxes with respect to Charter Hire, by any
taxing jurisdiction (including the Registration Jurisdiction, except with
respect to any taxes included in documentation costs for Owners' account
pursuant to Clause 6(a) hereof), including changing its jurisdiction of
incorporation or residence; provided however, that it shall not be required to
take, or fail to take, any action (x) if in the opinion of counsel such act or
failure to act would violate applicable law or (y) if in the reasonable
opinion of Owners the actions necessary to avoid or prevent imposition of such
taxes would be unduly burdensome. For purposes of clause (y) of the
immediately preceding sentence a requirement to change the jurisdiction of the
Owners' incorporation or residence shall not be treated as unduly burdensome.
(l) If any provision of this Charter shall be, or shall be
rendered, unenforceable in whole or in part (which for the purposes of this
Clause shall include being contrary to an official code or order for the time
being in force to which either of the parties hereto is required by law to
have regard and the contravention or the continued contravention of which
could be considered or be made unlawful) Owners and Charterers shall use their
best endeavors to agree to an amendment or amendments to the terms of this
Charter which would result in this Charter as so amended being fully
enforceable and achieving substantially the same result (both financially and
otherwise) so far as concerns Owners and Charterers as this Charter in its
executed form would have achieved if the same had been fully enforceable. If
Owners and Charterers are unable to agree such an amendment or amendments then
either party may by notice request that an arbitrator be appointed pursuant to
the provisions to Clause 23(i) to determine whether an amendment or amendments
which would achieve the result set out above are possible, he shall be asked
to specify them and the terms of this Charter shall be amended accordingly.
(m) The indemnities of Owners by Charterers contained in this
Charter shall continue in full force and effect (in respect of events
occurring during the currency of this Charter) notwithstanding the termination
of the charter of the Vessel, the repudiation by Charterers of this Charter or
the expiration of the charter period by effluxion of time or otherwise.
(n) Charterers and Owners agree that for United States tax
purposes this Charter is intended to be a financing arrangement and not a true
lease, and Charterers and Owners further agree to file their respective tax
returns and reports consistent with such intention. This Charter shall be in
registered form within the meaning of section 163(f) of the United States
Internal Revenue Code of 1986, as amended, and Owners shall provide Charterers
upon request, any forms or reports reasonably requested by Charterers to
evidence such position, specifically including United States Internal Revenue
Service Form W-8 or any successor form.
24. Definitions
"Assignment of Charter" means the Assignment of this Charter by
Owners as collateral for the Owners obligations to the Lender.
"Assignment of Assignment of Charter" means the assignment of this
Charter by the Lender to the Collateral Trustee as security for the Lender's
obligations under the Indentures.
"Builder" means _____________________.
"Business Day" means any day other than a Saturday, a Sunday or a
day on which banking institutions in New York, New York, or in the city and
state where the Mortgagee's principal offices are located, are authorized or
are obligated by law, executive order or governmental decree to be closed.
"Certificate of Acceptance" means the certificate executed by
Charterers on the Commencement Date indicating Charterers' acceptance of the
Vessel under this Charter.
"Charter Hire" means the charter hire payable by Charterers for
the use and possession of the Vessel payable at the times and in the amounts
set forth on Schedule 1 attached hereto and made a part hereof.
"Charter Period" means the period of time from the Commencement
Date to the expiration or earlier termination of this Charter, pursuant to the
provisions hereof.
"Collateral Trustee" means Chemical Trust Company of California,
not in its individual capacity but solely as collateral trustee under the
Collateral Trust Agreement, dated as of ____________ 1, 1994, among the
Lender, the Collateral Trustee and the Trustee.
"Commencement Date" means the date on which the Vessel is accepted
by Owners under the Purchase Agreement and by Charterers under this Charter.
"Compulsory Acquisition" means requisition for title or other
compulsory acquisition of the Vessel (otherwise than by requisition for hire),
capture, seizure, condemnation, destruction, detention or confiscation of the
Vessel by any government or by persons acting or purporting to act on behalf
of any government or governmental authority.
"Default Rate" means a rate per annum equal to the sum of 1.50%
and LIBOR as of the commencement of such period.
"Event of Default" means an event described in sub-clauses (a)(i)
through (a)(vi) of Clause 17.
"Indentures" means the Indenture, dated as of _______ 1, 1994
between the Lender and the Trustee pursuant to which the Term Mortgage Notes
will be issued and the Indenture, dated as of ________ 1, 1994 between the
Lender and the Trustee pursuant to which the Serial Mortgage Notes will be
issued.
"Institute Warranty Limits" means the Institute Warranties as
defined by the Institute of London Underwriters.
"Lender" means California Petroleum Transportation Corporation, a
corporation organized under the laws of the State of Delaware.
"LIBOR" means the rate calculated on the basis of the offered
rates for deposits in dollars for a one-month period which appear on the
Reuters Screen LIBO Page as of 11:00 A.M., London time, on the date that is
two London Banking Days preceding the date of calculation. If at least two
such offered rates appear on the Reuters Screen LIBO Page, LIBOR will be the
arithmetic mean of such offered rates (rounded to the nearest .0001 percentage
point). If, at any time of determination, the Reuters Screen LIBO Page is not
available, LIBOR will be calculated as the average (rounded upward, if
necessary, to the next higher 1/16 of 1%) of the respective ratio per annum at
which deposits in dollars for a one month period are offered to each of three
reference banks in the London interbank market at approximately 11:00 A.M.,
London time, on the date that is two London Banking Days preceding the date of
calculation. Each of Charterers and Owners (or Owners' assignee) will select
a reference bank and the third reference bank will be selected by Charterers
and Owners (or Owners' assignee) together or, failing agreement, by the
previously selected reference banks together.
"London Banking Day" means any day on which dealings in deposits
in United States dollars are carried on in the London interbank market and on
which commercial banks are open for domestic and international business
(including dealings in United States dollar deposits) in London and New York.
"Mortgage" means the Mortgage, dated the date hereof, between
Owners and the Mortgagee or any other mortgage relating to the financing of
the Vessel by Owners.
"Mortgagee" means the Lender and any successor thereto or any
other mortgagee of the Vessel.
"Optional Termination Amount" means the amount indicated below
with respect to the Optional Termination Dates:
Optional Termination Date Optional Termination
Amount
____________, 200_ $___________
____________, 200_ $___________
____________, 200_ $___________
[____________, 200_] $___________
"Optional Termination Date" means the [8th, 10th, 12th or 14th]
[9th, 11th, 13th or 15th] [10th, 12th, 14th or 16th] [11th, 13th or 15th]
anniversary of the Commencement Date.
"Owner Taxes" means any income, franchise or equivalent tax,
imposed upon or measured by the net income, stated capital or earned surplus
of an Owner by any federal, state, local or other taxing authority of any
jurisdiction worldwide, or any tax imposed pursuant to Section 887 of the
United States Internal Revenue Code of 1986, as amended, or any taxes that
result from the willful misconduct or gross negligence of an Owner or from the
inaccuracy or breach of any representation, warranty or covenant of an Owner
contained in any of Clauses 6(a), 20, 21(a)(iv), 23(k) or 23(n) of this
Charter or in any document furnished in connection with such Clauses by an
Owner, or any taxes that would not have been imposed but for the failure of any
Owner (a) to provide to Charterers (for filing by Charterers with the taxing
jurisdiction imposing such taxes or retention in Charterers' records) upon
Charterers' timely request such certifications, information, documentation or
reports concerning such Owner's identity, jurisdiction of incorporation or
residency, or connection with such taxing jurisdiction or (b) to promptly file
upon Charterers' timely request such reports or returns (which shall be
prepared with reasonable care in accordance with Charterers' written
instructions) claiming (or availing itself of) any applicable extensions or
exemptions (to the extent that timely notice thereof is provided by
Charterers); provided that Owner Taxes shall not include any such tax imposed
on any amount that is (i) an indemnity or reimbursement of an Owner, (ii) an
operating or maintenance expense, or (iii) a tax for which Charterers are
otherwise liable under this Charter; and provided further that Owner Taxes
shall not include any such tax imposed by any government, jurisdiction or
taxing authority other than the United States Federal government solely as a
result of the location of the Vessel or the Vessel's use by Charterers.
"Person" means an individual, a partnership, a corporation, a
joint venture, an unincorporated association, a joint-stock company, a trust,
or other entity or a government or any agency or political subdivision thereof.
"P&I Club" means a protection and indemnity association.
"Purchase Agreement" means the Vessel Purchase Agreement, dated as
of _______, 1994, between Owners and Charterers.
"Registration Jurisdiction" means the [Republic of Liberia]
[Commonwealth of the Bahamas] [Islands of Bermuda].
"Security Documents" means all of the agreements executed and
delivered by Owners to the Lender as collateral security for Owners'
obligations to the Lenders.
"Serial Mortgage Notes" means the Serial First Preferred Term
Mortgage Notes which will mature serially from _____________, 1995 to
_____________, 2005 in the initial aggregate amount of $168,500,000 issued by
the Lender concurrently with the issuance of the Term Mortgage Notes.
"Stipulated Loss Value" means, as of any date, the amount
corresponding to such date as indicated on Schedule 2 hereto and made a part
hereof.
"Term Mortgage Notes" means __% First Preferred Mortgage Notes Due
2014 in the initial aggregate amount of $117,900,000 issued by the Lender
concurrently with the issuance of the Serial Mortgage Notes.
"Total Loss" means either (a) actual or constructive or
compromised or arranged total loss of the Vessel, (b) Compulsory Acquisition
of the Vessel or (c) if so declared by Charterers at any time and in their
sole discretion a requisition for hire of the Vessel for a period in excess of
180 days. Any actual loss of the Vessel shall be deemed to have occurred at
1200 hours Greenwich Mean Time (GMT) on the actual date on which the Vessel
was lost or in the event of the date of the loss being unknown then the actual
total loss shall be deemed to have occurred at 1200 hours GMT on the day next
following the day on which the Vessel was last heard of. A constructive total
loss shall be deemed to have occurred at 1200 hours GMT on the earliest of: 1)
the date that notice of abandonment of the Vessel is given to the insurers
provided a claim for total loss is admitted by the insurers, or 2) if the
insurers do not admit such a claim, at the date and time GMT at which a total
loss is subsequently adjudged by a competent court of law or arbitration
tribunal to have occurred, or 3) the date that a report is rendered by one or
more experts in marine surveying and vessel valuation (said experts to be
appointed by Charterers at their expense and approved by Owners, such approval
not to be unreasonably withheld) concluding that salvage, repair and
associated costs in restoring the Vessel to the condition specified in Clause
7 exceed the Vessel's fair market value in sound condition.
"TOVALOP Scheme" means the Tankers Owners Voluntary Agreement
concerning Liability for Oil Pollution dated January 7, 1969, as amended.
"Trustee" means Chemical Trust Company of California, not in its
individual capacity but solely as indenture trustee under the Indentures.
IN WITNESS WHEREOF the parties have caused this Charter to be
signed the date and year first above written.
[NAME OF OWNER]
By:___________________________
Name:_________________________
Its:__________________________
CHEVRON TRANSPORT CORPORATION
By:___________________________
Name:_________________________
Its:__________________________
___________________________________________________________________________
___________________________________________________________________________
EXHIBIT 10.3
Chevron Transport Corporation
Seller
and
Calpetro Tankers (Bahamas I) Limited
Buyer
_______________________________
VESSEL PURCHASE AGREEMENT
Dated as of ______ __, 1994
______________________________
_________________________________________________________________________
_________________________________________________________________________
TABLE OF CONTENTS
Page
ARTICLE I
SALE OF VESSEL AND ASSIGNMENT OF WARRANTIES
Section 1.01 Sale of Vessel........................................... 1
Section 1.02 Assignment of Warranties................................. 1
ARTICLE II
INDEMNIFICATIONS FOR WARRANTIES,
PATENTS, TRADEMARKS AND COPYRIGHTS
Section 2.01 Indemnity................................................ 2
ARTICLE III
CLOSING AND PLACE OF DELIVERY
Section 3.01 Delivery Date............................................ 2
Section 3.02 Place of Delivery........................................ 2
Section 3.03 Delivery Procedure....................................... 2
ARTICLE IV
PURCHASE PRICE, MANNER OF PAYMENT AND DEPOSIT
Section 4.01 Purchase Price........................................... 3
ARTICLE V
TRANSFER OF TITLE TO VESSEL AND DELIVERY REQUIREMENTS
Section 5.01 Seller's Conditions Precedent............................ 3
Section 5.02 Buyer's Conditions Precedent............................. 4
Section 5.03 Transfer of Title........................................ 5
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE SELLER
Section 6.01 Organization, Power and Status of the Seller............. 5
Section 6.02 Authorization; Enforceability; Execution and Delivery.... 5
Section 6.03 No Conflicts; Laws and Consents; No Default.............. 5
Section 6.04 Governmental Approvals................................... 6
Section 6.05 Litigation............................................... 6
Section 6.06 Taxes.................................................... 6
Section 6.07 Good Title............................................... 6
Section 6.08 Vessel Requirements...................................... 6
Section 6.09 Brokers.................................................. 6
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE BUYER
Section 7.01 Organization, Power and Status of the Buyer.............. 7
Section 7.02 Authorization; Enforceability; Execution and Delivery.... 7
Section 7.03 No Conflicts; Laws and Consents; No Default.............. 7
Section 7.04 Governmental Approvals................................... 7
Section 7.05 Litigation............................................... 8
Section 7.06 Brokers.................................................. 8
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01 Amendment................................................ 8
Section 8.02 Severability............................................. 8
Section 8.03 Notices.................................................. 8
Section 8.04 Consent to Jurisdiction.................................. 8
Section 8.05 Captions................................................. 9
Section 8.06 Governing Law............................................ 9
Section 8.07 No Partnership........................................... 9
Section 8.08 Counterparts............................................. 9
Section 8.09 Survival................................................. 9
Section 8.10 Integration.............................................. 9
Section 8.11 Reproduction of documents................................ 10
Section 8.12 Successors and Assigns; Assignment....................... 10
Section 8.14 General Interpretive Principles.......................... 10
Section 8.15 Effective date of Transaction............................ 11
EXHIBITS
EXHIBIT A
Vessel Delivery Receipt Under the Vessel Purchase Agreement
EXHIBIT B
Bill of Sale
EXHIBIT C
Delivery and Other Requirements
VESSEL PURCHASE AGREEMENT
THIS VESSEL PURCHASE AGREEMENT ("Agreement") is entered into as of
______ __, 1994 by and between CHEVRON TRANSPORT CORPORATION, a corporation
organized and existing under the laws of the Republic of Liberia (the
"Seller"), and CALPETRO TANKERS (BAHAMAS I) LIMITED, a company organized and
existing under the laws of The Commonwealth of the Bahamas (the "Buyer").
PRELIMINARY STATEMENT
The Buyer desires to purchase one Suezmax oil tanker registered
with the Maritime Division of the Ministry of Transport of The Bahamas under
Official No. __________, International Code Signal ______________ and named
____________ (the "Vessel") from the Seller and the Seller desires to sell the
Vessel to the Buyer and simultaneously charter back the Vessel to the Seller
pursuant to a bareboat charter between the Buyer and the Seller (the "Initial
Charter") executed concurrently herewith.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, and of other valuable consideration, receipt of
which is hereby acknowledged, the Seller and the Buyer hereby agree as follows:
ARTICLE I
SALE OF VESSEL AND ASSIGNMENT OF WARRANTIES
Section 1.01 Sale of Vessel. Effective as of ______ __, 1994 (the
"Closing Date") and subject to the terms and conditions set forth herein, the
Seller hereby agrees to sell to the Buyer and the Buyer hereby agrees to
purchase from the Seller the Vessel at the Purchase Price, as defined in
Section 4.01.
Section 1.02 Assignment of Warranties. Effective as of Closing
Date and subject to the terms and conditions set forth herein, the Seller
hereby assigns to the Buyer all of the Seller's right, title and interest in
all manufacturers' and vendors' warranties relating to the Vessel (other than
warranties which by their terms are unassignable) to the extent that such
warranties are still in effect with respect to the Vessel and the Seller
agrees reasonably to assist the Buyer in maintaining such warranties.
ARTICLE II
INDEMNIFICATIONS FOR WARRANTIES,
PATENTS, TRADEMARKS AND COPYRIGHTS
Section 2.01 Indemnity. (a) The Seller shall defend and save
harmless the Buyer from any liabilities or claims for or on account of the use
of any patents, copyrights or design of any nature or kind, or for the
infringement thereof including any unpatented invention made or used in the
performance of the construction contract for the Vessel (the "Construction
Contract") and also for any costs and expenses of litigation, if any in
connection therewith. Nothing contained herein shall be construed as
transferring any patent or trademark rights or copyright in equipment covered
by the Construction Contract, and all such rights are hereby expressly
reserved to the true and lawful owners thereof.
(b) The Seller hereby agrees to indemnify the Buyer for, and to
hold it harmless against, any loss, liability or expense incurred without
negligence or willful misconduct on the Buyer's part, arising out of or in
connection with any action taken by the Seller, or any failure to act, which
causes any warranties assigned by the Seller to the Buyer herein to become
unenforceable.
ARTICLE III
CLOSING AND PLACE OF DELIVERY
Section 3.01 Delivery Date. The Vessel will be delivered by the
Seller to the Buyer on the Closing Date.
Section 3.02 Place of Delivery. The place of delivery of the
Vessel shall be where the Vessel lies on the Closing Date.
Section 3.03 Delivery Procedure. The Seller shall deliver the
Vessel to the Buyer or a duly authorized representative of the Buyer ("Buyer's
Authorized Representative"). The Buyer or the Buyer's Authorized
Representative shall execute and deliver to the Seller a Vessel Delivery
Receipt therefor in the form annexed hereto as Exhibit A which Receipt shall
evidence the delivery of the Vessel to the Buyer.
ARTICLE IV
PURCHASE PRICE, MANNER OF PAYMENT AND DEPOSIT
Section 4.01 Purchase Price. (a) The purchase price (the "Purchase
Price") for the Vessel is Eighty Million, Six Hundred Sixty-Six Thousand, Six
Hundred Sixty-Six and 66/100's US Dollars (US$80,666,666.66).
(b) On the Closing Date, the Buyer shall pay to the Seller
the Purchase Price for the Vessel by wire transfer of the Purchase Price to
the Seller's account as follows:
___________________
___________________
___________________
ARTICLE V
TRANSFER OF TITLE TO VESSEL AND DELIVERY REQUIREMENTS
Section 5.01 Seller's Conditions Precedent. The Buyer's obligation
to accept the Vessel from the Seller and to pay the Purchase Price pursuant to
Article IV, shall be subject to fulfillment of the following conditions
precedent on or before the Closing Date, all documents to be in form and
substance reasonably acceptable to the Buyer:
(a) The Vessel shall meet the requirements set forth in Exhibit
C;
(b) The Buyer shall have received a certificate evidencing
resolutions of the Board of Directors of the Seller, certified by the
Secretary or other appropriate officer of the Seller, duly authorizing
the execution, delivery and performance of this Agreement and related
documents;
(c) The Buyer shall have received all documentation, licenses
and permits reasonably necessary to:
(i) evidence cancellation of the registration of the
Vessel in the name of the Seller;
(ii) evidence that the sale and transfer of the Vessel to
the Buyer is free and clear of all liens, claims, charges and
encumbrances of any nature whatsoever arising by, through or under
the Seller;
(d) The Buyer shall have received a bill of sale for the Vessel,
in the form attached hereto as Exhibit B, executed by the Seller
in favor of the Buyer;
(e) Certain securities (the "Securities") shall be issued
pursuant to two indentures (the "Indentures") entered into
between Chemical Trust Company of California and California
Petroleum Transport Corporation;
(f) the Seller shall have executed and delivered the Initial
Charter;
(g) The representations and warranties of the Seller contained
in Section 4.01(a) and Article VII hereof shall be true and
correct as though made on and as of such date;
(h) The Buyer shall have received the technical documents and
materials set forth in Appendix 1 to Exhibit C;
(i) Chevron Corporation shall have executed and delivered the
Guaranty of Chevron Corporation dated as of _____________.
Section 5.02 Buyer's Conditions Precedent. The Seller's obligation
to sell and deliver the Vessel to the Buyer on the Closing Date shall be
subject to the fulfillment as to the Vessel of the following conditions
precedent on or before the Closing Date for the Vessel, all documents to be in
form and substance reasonably acceptable to the Seller:
(i) The Seller shall have received a certificate evidencing
resolutions of the Board of Directors of the Buyer, certified by the
Secretary of the Buyer, duly authorizing the execution, delivery and
performance of this Agreement and other documents relating hereto,
together with certification of the incumbency and the specimen signature
of each officer of the Buyer executing this Agreement or any other
document relating hereto;
(ii) The Vessel shall not have been lost, stolen, destroyed,
damaged so as to render it permanently unfit for normal use or so as to
result in an insurance settlement on the basis of a total loss or a
constructive or compromised total loss, confiscated, condemned or seized
by any governmental authority, or otherwise rendered undeliverable by
any cause occurring beyond the control of the Seller;
(iii) The representations and warranties of the Buyer contained in
Article VII of this Agreement shall be true and correct as though made
on and as of such date;
(iv) the Buyer shall have executed and delivered the Initial
Charter;
(v) The Seller shall have received the Purchase Price in respect
of the Vessel in the manner described in Section 4.01(b).
Section 5.03 Transfer of Title. Title and risk of loss of or
damage to the Vessel shall pass from the Seller to the Buyer at the time
appearing on the Vessel Delivery Receipt on the Closing Date.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the Buyer as follows:
Section 6.01 Organization, Power and Status of the Seller. The
Seller (a) is a corporation duly formed, validly existing and in good standing
under the laws of The Republic of Liberia and (b) is duly authorized, to the
extent necessary, to do business in each jurisdiction where the character of
its properties or the nature of its activities makes such qualification
necessary. The Seller has all requisite corporate power and authority to own
and operate the property it purports to own and to carry on its business as
now being conducted and as proposed to be conducted in respect of the Vessel.
Section 6.02 Authorization; Enforceability; Execution and Delivery.
(a) The Seller has all necessary corporate power and authority to execute,
deliver and perform under this Agreement and each other document to which it
is a party.
(b) All action on the part of the Seller that is required for the
authorization, execution, delivery and performance of this Agreement and each
other related document to which it is a party, in each case has been duly and
effectively taken; and the execution, delivery and performance of this
Agreement and each such other document does not require the approval or
consent of any Person except for such consents and approvals as have been
obtained on or prior to the Closing Date.
(c) This Agreement and each other related document to which the
Seller is a party has been duly executed and delivered by it. Each of this
Agreement and each such other document to which the Seller is a party
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with the terms thereof.
Section 6.03 No Conflicts; Laws and Consents; No Default. (a)
Neither the execution, delivery and performance of this Agreement nor the
consummation of any of the transactions contemplated hereby nor performance of
or compliance with the terms and conditions hereof (i) contravenes any
Requirement of Law applicable to the Seller or the Vessel, (ii) constitutes a
default under any document or (iii) results in the creation or imposition of
any Liens on the Vessel (other than Liens created by any of the documents) or
results in the acceleration of any obligation.
(b) The Seller is in compliance with and not in default under any
and all Requirements of Law applicable to the Seller and the Vessel and all
terms and provisions of this Agreement and all other related documents.
Section 6.04 Governmental Approvals. All Governmental Approvals
which are required to be obtained in the name of the Seller in connection with
(a) the construction, operation and maintenance of the Vessel and (b) the
execution, delivery and performance by the Seller of this Agreement and the
related documents have been obtained and are in effect on the Closing Date.
Section 6.05 Litigation. There are no actions, suits or
proceedings at law or in equity or by or before any Governmental Authority now
pending against the Seller or, to the best of the Seller's knowledge,
threatened against the Seller or pending or threatened against any property or
other assets or rights of any of the Seller with respect to the Vessel and this
Agreement and any other related document.
Section 6.06 Taxes. The Seller has filed, or caused to be filed,
all tax and information returns that are required to have been filed by it in
any jurisdiction and has paid, or caused to be paid, all taxes shown to be due
and payable on such returns and all other taxes and assessments payable by it,
including, without limitation, any taxes payable by the Seller with respect to
the Vessel, to the extent the same have become due and payable, but excluding
any taxes which the Seller is contesting in good faith and by appropriate
proceedings, provided such contest does not subject the Vessel to imminent
forfeiture or sale.
Section 6.07 Good Title. At the time of delivery of the Vessel to
the Buyer pursuant to the terms hereof, the Seller shall have good and
marketable title to the Vessel, free and clear of any liens, claims and
encumbrances of any nature whatsoever.
Section 6.08 Vessel Requirements. (a) The Vessel is tight, staunch
and strong and well and sufficiently tackled, apparelled, furnished and
equipped and in all respects seaworthy.
(b) The Vessel is classed _______________________ with America
Bureau of Shipping free of all requirements, recommendations and
notations of the said classification society affecting such
classification which have not been complied within accordance with their
terms.
Section 6.09 Brokers. Except for the fees of McQuilling Brokerage
Partners, Inc., Xenon Shipping AS and Merrimac Shipping Ltd. payable by the
Buyer, the Seller has not become obligated to pay any fee or commission to or
any expenses of any broker or finder or anyone else acting in the capacity of
broker or finder in connection with the transactions contemplated hereby.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby represents and warrants to the Seller as follows:
Section 7.01 Organization, Power and Status of the Buyer. The
Buyer (a) is a corporation duly formed, validly existing and in good standing
under the laws of The Commonwealth of the Bahamas and (b) is duly authorized,
to the extent necessary, to do business in each jurisdiction where the
character of its properties or the nature of its activities makes such
qualification necessary. The Buyer has all requisite corporate power and
authority to own and operate the property it purports to own and to carry on
its business as now being conducted and as proposed to be conducted in respect
of the Vessel.
Section 7.02 Authorization; Enforceability; Execution and Delivery.
(a) The Buyer has all necessary corporate power and authority to execute,
deliver and perform under this Agreement and each other document to which it
is a party.
(b) All action on the part of the Buyer that is required for the
authorization, execution, delivery and performance of this Agreement and each
other document to which it is a party, in each case has been duly and
effectively taken; and the execution, delivery and performance of this
Agreement and each such other document does not require the approval or
consent of any Person except for such consents and approvals as have been
obtained on or prior to the Closing Date.
(c) This Agreement and each other related document to which the
Buyer is a party has been duly executed and delivered by it. Each of this
Agreement and each other document to which the Buyer is a party constitutes
its legal, valid and binding obligation, enforceable against it in accordance
with the terms thereof.
Section 7.03 No Conflicts; Laws and Consents; No Default. (a)
Neither the execution, delivery and performance of this Agreement nor the
consummation of any of the transactions contemplated hereby nor performance of
or compliance with the terms and conditions hereof (i) contravenes any
Requirement of Law applicable to the Buyer or (ii) constitutes a default under
any document.
(b) The Buyer is in compliance with and not in default under any
and all Requirements of Law applicable to the Buyer and all terms and
provisions of this Agreement and all other documents.
Section 7.04 Governmental Approvals. All Governmental Approvals
which are required to be obtained in the name of the Buyer in connection with
the execution, delivery and performance by the Buyer of this Agreement and the
documents have been obtained and are in effect on the Closing Date.
Section 7.05 Litigation. There are no actions, suits or
proceedings at law or in equity or by or before any Governmental Authority now
pending against the Buyer or, to the best of the Buyer's knowledge, threatened
against the Buyer or pending or threatened against any property or other
assets or rights of any of the Buyer with respect to this Agreement and any
other related document.
Section 7.06 Brokers. Except for the fees of McQuilling Brokerage
Partners, Inc., Xenon Shipping AS and Merrimac Shipping Limited by the Buyer,
the Buyer has not become obligated to pay any fee or commission to or any
expenses of any broker or finder or anyone else acting in the capacity of
broker or finder in connection with the transactions contemplated hereby.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01 Amendment. This Agreement may be amended from time to
time by written agreement signed by the parties hereto.
Section 8.02 Severability. If any provision of this Agreement is
held to be in conflict with any applicable statute or rule of law or is
otherwise held to be unenforceable for any reason whatsoever, such
circumstances shall not have the effect of rendering the provision in question
inoperative or unenforceable in any other case or circumstance, or of
rendering any other provision or provisions herein contained invalid,
inoperative, or unenforceable to any extent whatsoever. The invalidity of any
one or more phrases, sentences, clauses or Sections of this Agreement
contained, shall not affect the remaining portions of this Agreement, or any
part thereof.
Section 8.03 Notices. All demands, notices and communications
hereunder shall be in writing, personally delivered or mailed by certified
mail-return receipt requested, and shall be deemed to have been duly given
upon receipt (a) in the case of the Seller, at the following address: Chevron
House, 11 Church Street, Hamilton, Bermuda HM111, (b) in the case of the
Buyer, at the following address: United House, 14-16 Nelson Street, Douglas,
Isle of Man, or at other such address as shall be designated by such party in
a written notice to the other parties.
Section 8.04 Consent to Jurisdiction. Any legal suit, action or
proceeding against the Buyer or the Seller arising out of or relating to this
Agreement, or any transaction contemplated hereby, may be instituted in any
federal or state court in The City of New York, State of New York and the
Buyer and the Seller each hereby waive any objection which it may now or
hereafter have to the laying of venue of any such suit, action or proceeding,
and the Buyer and the Seller hereby irrevocably submit to the jurisdiction of
any such court in any such suit, action or proceeding. The Buyer and the
Seller each hereby irrevocably appoints and designates CT Corporation System
("CT"), having an address at 1633 Broadway, New York, New York, its true and
lawful attorney-in-fact and duly authorized agent for the limited purpose of
accepting servicing of legal process and the Buyer and the Seller each agree
that service of process upon CT at such address shall constitute personal
service of such process on such party. The Buyer and the Seller each shall
maintain the designation and appointment of such authorized agent until all
amounts payable under this Agreement shall have been paid in full. If such
agent shall cease to so act, the Buyer and the Seller each shall immediately
designate and appoint another such agent satisfactory to the other party and
shall promptly deliver to the other party evidence in writing of such other
agent's acceptance of such appointment.]
Section 8.05 Captions. The captions or headings in this Agreement
are for convenience only and in no way define, limit or describe the scope or
intent of any provisions or sections of this Agreement.
Section 8.06 Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York, without
giving effect to the principles of conflicts of law.
Section 8.07 No Partnership. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture among the parties
hereto and the services of each party shall be rendered as an independent
contractor and not as agent for any other party.
Section 8.08 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto on separate
counterpart, each of which shall be deemed to be an original. Such
counterparts shall constitute one and the same agreement.
Section 8.09 Survival. The representations, covenants and
agreements contained in or made pursuant to this Agreement in respect of
either party hereto shall survive the execution and delivery of this Agreement
and shall continue in effect so long as such party's obligations hereunder
remain outstanding.
Section 8.10 Integration. This Agreement and the Schedule and
Exhibits hereto constitute the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and supersede all
prior agreements, understandings or representations pertaining to the subject
matter hereof, whether oral or written. There are no warranties,
representations or other agreements between the parties in connection with the
subject matter hereof except as specifically set forth or incorporated herein.
Section 8.11 Reproduction of documents. This Agreement and all
documents relating thereto, including, without limitation, (a) consents,
waivers and modifications which may hereafter be executed, (b) documents
received by any party at the closing, and (c) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made in the regular course
of business) and that any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence.
Section 8.12 Successors and Assigns; Assignment. This Agreement
shall be binding upon and inure to the benefit of the Buyer and the Seller and
their respective successors and assigns. Neither party hereto shall have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the other.
Section 8.13 Intention of the Parties. This Agreement and the
Initial Charter have been structured with the intention that the purchase of
the Vessel and its charter back to the Seller will qualify under applicable
United States tax law as a financing arrangement, and not be treated as a sale
and a true lease for such purposes, and Seller and Buyer further agree to file
their respective tax returns and reports consistent with such intention.
Section 8.14 General Interpretive Principles. For purposes of this
Agreement except as otherwise expressly provided or unless the context
otherwise requires:
(a) the defined terms in this Agreement shall include the plural
as well as the singular, and the use of any gender herein shall be deemed to
include any other gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles as in effect on the date hereof;
(c) references herein to "Articles", "Sections", "Subsections",
"paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, paragraphs and other subdivisions
of this Agreement;
(d) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to paragraphs and
other subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Loan Agreement as a whole and not to any
particular provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
Section 8.15 Effective date of Transaction. Notwithstanding and
the fact that this Agreement is dated as of ______ 1, 1994, the transactions
set forth herein shall not be effective until the Closing Date.
Section 8.16 Additional Definitions.
(a) "Governmental Approval" means any authorization, consent,
approval, license, franchise, lease, ruling, permit, tariff, rate,
certification, exemption, filing or registration by or with any Governmental
Authority relating to the ownership of the Vessel or to the execution,
delivery or performance of this Agreement.
(b) "Governmental Authority" means the federal government, any
state or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government and any other governmental entity with authority over
the Seller or operation of the Vessel.
(c) "Law" means any statute, law, rule, regulation, ordinance,
order, code, policy or rule of common law, now or hereafter in effect, and any
judicial or administrative interpretation thereof by a Governmental Authority
or otherwise, including any judicial or administrative order, consent decree
or judgment.
(d) "Lien" means any mortgage, lien (statutory or other),
pledge, security interest, encumbrance, claim, hypothecation, assignment for
security, deposit arrangement or preference or other security agreement of any
kind or nature whatsoever. For purposes of this Agreement, a Person shall be
deemed to own subject to a Lien any property which it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement.
(e) "Person" means an individual, a partnership, a corporation,
a joint venture, an unincorporated association, a joint-stock company, a
trust, or other entity or a government or any agency or political subdivision
thereof.
(f) "Requirement of Law" means, as to any Person, the
certificate of incorporation and by-laws or partnership agreement or other
organizational or governing documents of such Person, and, any Law applicable
to or binding upon such Person or any of its properties or to which such
Person or any of its properties is subject.
IN WITNESS WHEREOF, the Buyer and the Seller have caused this
Vessel Purchase Agreement to be duly executed and delivered by their
respective officers thereunto duly authorized all as of the day and year first
above written.
Buyer Seller
CALPETRO TANKERS (BAHAMAS I) CHEVRON TRANSPORT CORPORATION
LIMITED
By: ______________________ By:____________________________
Name:_____________________ Name:__________________________
Its:______________________ Its:___________________________
EXHIBIT A
VESSEL DELIVERY RECEIPT
UNDER THE VESSEL PURCHASE AGREEMENT
Pursuant to the Vessel Purchase Agreement, dated as of ______ __,
1994 between CalPetro Tankers (Bahamas I) Limited (the "Buyer") and Chevron
Transport Corporation (the "Seller"), the undersigned hereby acknowledges on
behalf of the Buyer delivery on the date hereof of one Suezmax oil tanker
registered with the Maritime Division of the Ministry of Transport of The
Bahamas under Official No. _____ and International Code Signal ____ and named
__________.
The Vessel is in the condition required by the Vessel Purchase
Agreement and by execution hereof the Buyer accepts delivery of the Vessel by
the Seller.
Dated: ____________________ CALPETRO TANKERS (BAHAMAS I)
LIMITED
Time: ____________________
By:___________________________________
Name:_________________________________
Its:__________________________________
EXHIBIT B
BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS:
CHEVRON TRANSPORT CORPORATION ("Seller"), a Liberian Corporation,
is the owner of full legal and beneficial title to that Suezmax oil tanker
bearing OFFICIAL NUMBER ________________ and INTERNATIONAL CODE SIGNAL
____________ and named ________________ ("Vessel") and all appliances, parts,
instruments, appurtenances, accessories, furnishings, and other equipment of
whatever nature installed on or attached to such Vessel (hereinafter referred
to as the "Parts").
THAT for and in consideration of the sum of Eighty Million, Six
Hundred Sixty-Six Thousand, Six Hundred Sixty-Six and 66/100's US Dollars
(US$80,666,666.66), the Seller does hereby grant, convey, transfer, bargain
and sell, deliver and set over unto CalPetro Tankers (Bahamas I) Limited,
whose address is Mareva House, 4 George Street, Nassau, Bahamas, and unto its
successors and assigns forever, all of the Seller's right, title and interest
in and to the above described Vessel and Parts.
THAT Seller hereby warrants to the Buyer, its successors and
assigns, that there is hereby conveyed to the Buyer on the date hereof, good
and marketable title to the aforesaid Vessel and Parts, free and clear of all
liens and encumbrances of any nature whatever, which may arise by, through or
under the Seller, except Seller's rights under that certain Bareboat Charter
between Buyer and Seller dated as of ______ 1, 1994.
This Bill of Sale shall be governed by the laws of the Republic of
Liberia.
IN WITNESS WHEREOF, the Seller has caused this Bill of Sale to be
executed in its name this ____ day of ______, 1994.
CHEVRON TRANSPORT CORPORATION
By:_________________________
Name:_______________________
Its:________________________
EXHIBIT C
DELIVERY AND OTHER REQUIREMENTS
It is the intent of this Agreement that the Vessel and components
shall be delivered in a condition set forth below.
On Delivery the Vessel shall:
a) Be in an seaworthy condition;
b) In compliance with the current rules and regulations of the
American Bureau of Shipping (hereinafter called the
"Classification Society"), to be classed and registered as
____________________________________and _____________ Flag.
Vessel to be equipped in accordance with regulations of
_____________;
c) Upon Delivery have in existence a valid and existing
Certificate of Ownership and Encumbrance with respect to the
Vessel issued by the ______________________________ (the
"Ministry of Transport") and be in compliance with its rules
and regulations;
OTHER CONDITIONS
a) Documents. The Seller will provide one full set of all
technical documents listed in Appendix I hereto.
______________________________________________________________________________
______________________________________________________________________________
California Petroleum Transport Corporation
and
CalPetro Tankers (Bahamas I) Limited
___________________________________
ASSIGNMENT OF PURCHASE AGREEMENT
Dated as of ________ 1, 1994
___________________________________
______________________________________________________________________________
______________________________________________________________________________
Table of Contents
Page No.
ARTICLE I
DEFINITIONS
ARTICLE II
ASSIGNMENT
Section 2.01 Security Interest........................................ 1
Section 2.02 Assignment............................................... 2
Section 2.03 Owner to Remain Liable................................... 2
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE OWNER
Section 3.01 Organization, Power and Status of the Owner.............. 2
Section 3.02 Authorization; Enforceability; Execution and Delivery.... 3
Section 3.03 No Conflicts; Laws and Consents; No Default.............. 3
Section 3.04 Governmental Approvals................................... 3
Section 3.05 Litigation............................................... 3
Section 3.06 No Prior Assignment...................................... 3
Section 3.07 The Purchase Agreement................................... 4
ARTICLE IV
COVENANTS OF THE OWNER
Section 4.01 Consent of Seller........................................ 4
Section 4.02 Enforcement of Purchase Agreement........................ 4
Section 4.03 Amendment of Purchase Agreement; Assignment of Purchase
Agreement................................................ 4
Section 4.04 Performance of Obligations............................... 4
Section 4.05 Notices.................................................. 5
Section 4.06 Further Assurances....................................... 5
Section 4.07 Lender as Attorney-in-Fact of Owner...................... 5
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01 Amendment................................................ 5
Section 5.02 Severability............................................. 5
Section 5.03 Notices.................................................. 5
Section 5.04 Consent to Jurisdiction.................................. 6
Section 5.05 Captions................................................. 6
Section 5.06 Governing Law............................................ 6
Section 5.07 No Partnership........................................... 6
Section 5.08 Counterparts............................................. 6
Section 5.09 Survival................................................. 6
Section 5.10 Integration.............................................. 7
Section 5.11 Reproduction of Documents................................ 7
Section 5.12 Successors and Assigns; Assignment....................... 7
Section 5.13 General Interpretive Principles.......................... 7
Section 5.14 Effective Date of Transaction............................ 8
Assignment of Purchase Agreement, dated as of ________ 1, 1994 (the
"Assignment"), between California Petroleum Transport Corporation, a
corporation organized under the laws of the State of Delaware (the
"Lender") and CalPetro Tankers (Bahamas I) Limited, a company organized
under the laws of The Commonwealth of the Bahamas (the "Owner").
PRELIMINARY STATEMENT
The Owner has requested that the Lender make two loans to the
Owner: one loan in the aggregate principal amount equal to $____________ (the
"Term Loan") and one series of loans in the aggregate principal amount equal
to $____________ (collectively, the "Serial Loans" and, collectively with the
Term Loan, the "Loans"). The Loans will be made pursuant to the terms and
conditions of two Loan Agreements, each dated as of the date hereof, each
between the Lender and the Owner. The net proceeds of the Serial Loans and
the Term Loan will be used by the Owner to acquire the m.t. _________ (the
"Vessel") from Chevron Transport Corporation (the "Seller") pursuant to the
terms and conditions of the Purchase Agreement, dated as of the date hereof
between the Owner and the Seller. The Vessel will be bareboat chartered to the
Seller pursuant to the Bareboat Charter (the "Initial Charter"), dated as of
the date hereof, between the Owner and the Seller. As collateral security for
its obligations under the Loan Agreements, the Owner will assign, pledge,
mortgage and grant the Lender a security interest in, inter alia, the Vessel,
the Initial Charter, the earnings and insurances of the Vessel and the
Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and of other valuable consideration, receipt of
which is hereby acknowledged, the Owner and the Lender hereby agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this Assignment shall have the meanings
assigned to such terms in Schedule 1 to this Assignment, and the definitions
of such terms shall be equally applicable to both the singular and plural
forms of such terms.
ARTICLE II
ASSIGNMENT
Section 2.01 Security Interest. This Assignment is made and
delivered as security for the Serial Obligations and the Term Obligations,
equally and ratably; provided, however, in the event that the Serial
Obligations are satisfied and paid in full pursuant to the terms and
conditions of the Serial Loan Agreement, this Assignment will be security
solely and exclusively for the Term Obligations.
Section 2.02 Assignment. In order to provide for the payment of
and as security for the Serial Obligations and the Term Obligations, equally
and ratably, the Owner has sold, assigned, transferred, set over and granted a
security interest and does hereby sell, assign, transfer, set over and grant a
security interest unto the Lender, its successors and assigns, for its and
their respective successors' and assigns' own proper use and benefit, all of
the Owner's right, title and interest in and to the Purchase Agreement,
including without limitation any moneys whatsoever payable to the Owner under
the Purchase Agreement, together with the income and proceeds thereof and all
other rights and benefits whatsoever accruing to the Owner under the Purchase
Agreement; provided, however, that the Owner shall keep the Lender fully and
effectively indemnified from and against all actions, losses, claims,
proceedings, costs, demands and liabilities which may be suffered by the
Lender under or by virtue of the Purchase Agreement or this Assignment;
provided further, however, in the event that the Serial Obligations are
satisfied and paid in full pursuant to the terms and conditions of the Serial
Loan Agreement, the sale, assignment, transfer and grant of security interest
made by the Owner pursuant to the terms of this Assignment will be solely and
exclusively for the benefit of the Lender as Lender under the Term Loan
Agreement and this Assignment will be security solely and exclusively for the
Term Obligations.
Section 2.03 Owner to Remain Liable. (a) Anything in this
Assignment contained to the contrary notwithstanding, the Owner shall remain
liable under the Purchase Agreement, and shall observe, perform and fulfill
all of the conditions and obligations to be observed, performed and fulfilled
by it thereunder, and the Lender shall have no obligation or liability of any
kind whatsoever thereunder or by reason of or arising out of this Assignment,
nor shall the Lender be under any liability whatsoever in the event of any
failure by the Owner to perform its obligations thereunder or be required or
obligated in any manner to observe, perform or fulfill any of the conditions
or obligations of the Owner thereunder or pursuant thereto, or to make any
payment or to make any inquiry as to the nature or sufficiency of any payment
received by it or the Owner thereunder, or to present or file any claim, or to
take any other action to collect or enforce the payment of any amounts which
may have been assigned to the Lender or to which the Lender may be entitled
hereunder at any time or times.
(b) Any and all rights assigned herein may be further assigned by
the Lender, including, without being limited to, assignments in connection
with the enforcement of the assignments made by this Assignment and any
subsequent holder of this Assignment shall succeed to and have all the rights
and powers of the Lender under this Assignment.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE OWNER
The Owner hereby represents and warrants to the Lender as follows:
Section 3.01 Organization, Power and Status of the Owner. The
Owner (a) is a corporation duly formed, validly existing and in good standing
under the laws of The Commonwealth of the Bahamas and (b) is duly authorized,
to the extent necessary, to do business in each jurisdiction where the
character of its properties or the nature of its activities makes such
qualification necessary. The Owner has all requisite corporate power and
authority to own and operate the property it purports to own and to carry on
its business as now being conducted and as proposed to be conducted in respect
of the Vessel.
Section 3.02 Authorization; Enforceability; Execution and Delivery.
(a) The Owner has all necessary corporate power and authority to execute,
deliver and perform under this Assignment.
(b) All action on the part of the Owner that is required for the
authorization, execution, delivery and performance of this Assignment has been
duly and effectively taken; and the execution, delivery and performance of
this Assignment does not require the approval or consent of any Person except
for such consents and approvals as have been obtained on or prior to the
Closing Date.
(c) This Assignment has been duly executed and delivered by the
Owner. This Assignment constitutes the legal, valid and binding obligation of
the Owner, enforceable against it in accordance with the terms thereof.
Section 3.03 No Conflicts; Laws and Consents; No Default. (a)
Neither the execution, delivery and performance of this Assignment nor the
consummation of any of the transactions contemplated hereby nor performance of
or compliance with the terms and conditions hereof (i) contravenes any
Requirement of Law applicable to the Owner or (ii) constitutes a default under
any Security Document.
(b) The Owner is in compliance with and not in default under any
and all Requirements of Law applicable to the Owner and all terms and
provisions of this Assignment.
Section 3.04 Governmental Approvals. All Governmental Approvals
which are required to be obtained in the name of the Owner in connection with
the execution, delivery and performance by the Owner of this Assignment have
been obtained and are in effect on the Closing Date.
Section 3.05 Litigation. There are no actions, suits or
proceedings at law or in equity or by or before any Governmental Authority now
pending against the Owner or, to the best of the Owner's knowledge, threatened
against the Owner or pending or threatened against any property or other
assets or rights of the Owner with respect to this Assignment.
Section 3.06 No Prior Assignment. The Owner has not assigned or
pledged, and hereby covenants that it will not assign or pledge, so long as
this Assignment shall remain in effect, the Purchase Agreement or any part of
the rights, titles and interests hereby assigned, to anyone other than the
Lender, or its successors or assigns.
Section 3.07 The Purchase Agreement. The Purchase Agreement
constitutes the legal, valid and binding obligation of the Seller and the
Owner thereunder and is in full force and effect in the form of Exhibit "A"
attached hereto; there are no amendments, additions, addenda or modifications
thereto; said Exhibit "A" represents the entirety of the chartering and other
arrangements referred to therein; and neither of the parties thereto is in
default thereunder.
ARTICLE IV
COVENANTS OF THE OWNER
The Owner hereby covenants and agrees that so long as any of the
Serial Obligations or Term Obligations remains outstanding:
Section 4.01 Consent of Seller. On the Closing Date, the Owner
shall deliver to the Seller a copy of this Assignment and shall procure the
execution by the Seller of the Consents and Acknowledgment set out in Exhibit
A hereto and deliver said Consents and Acknowledgment to the Lender on the
Closing Date.
Section 4.02 Enforcement of Purchase Agreement. (a) The Owner
will do or permit to be done each and every act or thing which the Lender may
from time to time require to be done for the purpose of enforcing the Lender's
rights under the Purchase Agreement and this Assignment.
(b) The Owner will not exercise any right or powers conferred on
it by the Purchase Agreement in connection with any default or alleged default
by the Seller thereunder (including without limitation the right of
termination and substitution) unless and until requested so to do by the
Lender whereupon the Owner agrees that it will do so provided always that the
Lender shall not be responsible in any way whatsoever in the event that the
exercise of any right or power (including without limitation the right of
termination and substitution) be thereafter adjudged improper or to constitute
a repudiation of the Purchase Agreement by the Owner.
Section 4.03 Amendment of Purchase Agreement; Assignment of Purchase
Agreement. (a) The Owner will not, except with the previous written consent
of the Lender, agree to any variation of the Purchase Agreement or release the
Seller from any of its obligations thereunder or waive any breach of the
Seller's obligations thereunder or consent to any such act or omission of the
Seller as would otherwise constitute such breach.
(b) The Owner will not, except with the previous written consent
of the Lender, assign the Purchase Agreement to any other Person.
Section 4.04 Performance of Obligations. The Owner will perform
its obligations under the Purchase Agreement and use its best endeavors to
procure that the Seller shall perform its obligations under the Purchase
Agreement.
Section 4.05 Notices. The Owner will send a copy of all notices
received or given by it under the Purchase Agreement forthwith to the Lender.
Section 4.06 Further Assurances. The Owner will at any time and
from time to time, upon the written request of the Lender, promptly and duly
execute and deliver any and all such further instruments and documents and
take such action as the Lender may deem desirable in order to obtain the full
benefits of this Assignment and of the rights and powers herein granted.
Section 4.07 Lender as Attorney-in-Fact of Owner. The Owner hereby
constitutes the Lender, and its successors and assigns, its true and lawful
attorney-in-fact, irrevocably, with full power in its own name, in the name of
its agents or nominees or in the name of the Owner or otherwise, to ask,
require, demand, receive, enforce and give acquittance for, any and all moneys
and claims for moneys due and to become due and payable under or arising out
of the Purchase Agreement, to endorse any checks or other instruments or
orders in connection therewith and to file any claims or take any action or
institute any proceedings which to the Lender may seem to be necessary or
advisable under this Assignment. Any action or proceeding brought by the
Lender pursuant to any of the provisions of this Assignment or otherwise and
any claim made by the Lender hereunder may be compromised, withdrawn or
otherwise dealt with by the Lender without any notice to or approval of the
Owner.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01 Amendment. This Assignment may be amended from time
to time by written agreement signed by the parties hereto.
Section 5.02 Severability. If any provision of this Assignment is
held to be in conflict with any applicable statute or rule of law or is
otherwise held to be unenforceable for any reason whatsoever, such
circumstances shall not have the effect of rendering the provision in question
inoperative or unenforceable in any other case or circumstance, or of
rendering any other provision or provisions herein contained invalid,
inoperative, or unenforceable to any extent whatsoever. The invalidity of any
one or more phrases, sentences, clauses or Sections of this Assignment
contained, shall not affect the remaining portions of this Assignment, or any
part thereof.
Section 5.03 Notices. All demands, notices and communications
hereunder shall be in writing, personally delivered or mailed by certified
mail-return receipt requested, and shall be deemed to have been duly given
upon receipt (a) in the case of the Lender, at the following address: c/o JH
Management Corporation, Room 6/9, One International Place, Boston,
Massachusetts 02110-2624, (b) in the case of the Owner, at the following
address: United House, 14-16 Nelson Street, Douglas, Isle of Man, or at other
such address as shall be designated by such party in a written notice to the
other parties.
Section 5.04 Consent to Jurisdiction. Any legal suit, action or
proceeding against the Owner arising out of or relating to this Assignment, or
any transaction contemplated hereby, may be instituted in any federal or state
court in The City of New York, State of New York and the Owner hereby waives
any objection which it may now or hereafter have to the laying of venue of any
such suit, action or proceeding, and the Owner hereby irrevocably submits to
the jurisdiction of any such court in any such suit, action or proceeding.
The Owner hereby irrevocably appoints and designates CT Corporation System,
having an address at 1633 Broadway, New York, New York, its true and lawful
attorney-in-fact and duly authorized agent for the limited purpose of
accepting servicing of legal process and the Owner agrees that service of
process upon such party shall constitute personal service of such process on
the Owner. The Owner shall maintain the designation and appointment of such
authorized agent until all amounts payable under this Assignment shall have
been paid in full. If such agent shall cease to so act, the Owner shall
immediately designate and appoint another such agent satisfactory to the Lender
and shall promptly deliver to the Lender evidence in writing of such other
agent's acceptance of such appointment.
Section 5.05 Captions. The captions or headings in this Assignment
are for convenience only and in no way define, limit or describe the scope or
intent of any provisions or sections of this Assignment.
Section 5.06 Governing Law. This Assignment shall be governed by
and interpreted in accordance with the laws of the State of New York, without
giving effect to the principles of conflicts of law.
Section 5.07 No Partnership. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture among the parties
hereto and the services of each party shall be rendered as an independent
contractor and not as agent for any other party.
Section 5.08 Counterparts. This Assignment may be executed in any
number of counterparts and by different parties hereto on separate
counterpart, each of which shall be deemed to be an original. Such
counterparts shall constitute one and the same agreement.
Section 5.09 Survival. The representations, covenants and
agreements contained in or made pursuant to this Assignment in respect of
either party hereto shall survive the execution and delivery of this
Assignment and shall continue in effect so long as such party's obligations
hereunder remain outstanding.
Section 5.10 Integration. This Assignment and the Schedule and
Exhibits hereto constitute the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements, understandings or representations pertaining to the subject
matter hereof, whether oral or written. There are no warranties,
representations or other agreements between the parties in connection with the
subject matter hereof except as specifically set forth or incorporated herein.
Section 5.11 Reproduction of Documents. This Assignment and all
documents relating thereto, including, without limitation, (a) consents,
waivers and modifications which may hereafter be executed, (b) documents
received by any party at the closing, and (c) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made in the regular course
of business) and that any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence.
Section 5.12 Successors and Assigns; Assignment. This Assignment
shall be binding upon and inure to the benefit of the Owner and the Lender and
their respective successors and assigns. The Owner shall not have the right
to assign its rights hereunder or any interest herein without the prior
written consent of the Lender. The Lender, at its sole option, shall have the
right to assign this Assignment, the Serial Loan Agreement, the Term Loan
Agreement, the Security Documents and any of its rights and interest hereunder
and thereunder.
Section 5.13 General Interpretive Principles. For purposes of this
Assignment except as otherwise expressly provided or unless the context
otherwise requires:
(a) the defined terms in this Assignment shall include the
plural as well as the singular, and the use of any gender herein shall be
deemed to include any other gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles as in effect on the date hereof;
(c) references herein to "Articles", "Sections", "Subsections",
"paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, paragraphs and other subdivisions
of this Assignment;
(d) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to paragraphs and
other subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Assignment as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
Section 5.14 Effective Date of Transaction. Notwithstanding and
the fact that this Assignment is dated as of ____________ 1, 1994, the
transactions set forth herein shall not be effective until the Closing Date.
IN WITNESS WHEREOF, the Owner and the Lender have caused this
Assignment to be duly executed and delivered by their respective officers
thereunto duly authorized all as of the day and year first above written.
CALIFORNIA PETROLEUM TRANSPORT
CORPORATION, as Lender
By:___________________________________
Name:_________________________________
Title:________________________________
CALPETRO TANKERS (BAHAMAS I) LIMITED, as Owner
By:___________________________________
Name:_________________________________
Title:________________________________
Schedule A
LETTER OF CONSENT AND ACKNOWLEDGMENT
TO ASSIGNMENT OF PURCHASE AGREEMENT
____________, 1994
CALIFORNIA PETROLEUM TRANSPORT
CORPORATION, as Lender
Dear Sirs:
The undersigned hereby consents to and acknowledges receipt of a
signed copy of the Assignment of Purchase Agreement (the "Assignment") dated
as of ___________ 1, 1994, by and between CalPetro Tankers (Bahamas I) Limited
and yourselves as adequate notice of such assignment to you of the Purchase
Agreement (as defined in the Assignment).
We confirm that the terms of the Purchase Agreement remain in full
force and effect and constitute the entire agreement between the parties
thereto with respect to the sale of the Vessel and that the Owner is not to
our knowledge presently in breach of the terms of the Purchase Agreement. We
further confirm that the terms of the Purchase Agreement have not been varied
or modified and that the terms of the Purchase Agreement will not after the
date hereof be varied or modified without your prior written consent.
We confirm that we have received no prior notice of any assignment
by the Owner of any interest in the Purchase Agreement.
The undersigned will not permit any amendment, modification,
cancellation or other alteration in the Purchase Agreement, nor will it
consent to or accept the substitution thereunder of any party for the Owner
without your prior written consent.
CHEVRON TRANSPORT CORPORATION, as Seller
By:___________________________________
Name:_________________________________
Title:________________________________
SCHEDULE 1
Defined Terms Used in the Assignment
"Assignment of Charter" means the assignment between the Owner and the
Lender, as amended from time to time in accordance with the terms thereof,
pursuant to which the Owner assigns to the Lender all of its right, title and
interest in, to and under the Initial Charter to secure its obligations under
the Loan Agreements.
"Assignment of Earnings and Insurances" means the assignment between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner assigns to the Lender all of its
right, title and interest in, to and under the freights and hires (as well as
any charters entered into after the Closing Date) with respect to the Vessel
to secure its obligations under the Loan Agreements.
"Assignment of Guarantee" means the assignment between the Owner and the
Lender, as amended from time to time in accordance with the terms thereof,
pursuant to which the Owner assigns to the Lender all of its right, title and
interest in, to and under the Chevron Guarantee to secure its obligations
under the Loan Agreements.
"Assignment of Management Agreement" means the assignment between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner assigns to the Lender all of its
right, title and interest in, to and under the Management Agreement to secure
its obligations under the Loan Agreements.
"Assignment" or Assignment of Purchase Agreement" means the assignment
between the Owner and the Lender, as amended from time to time in accordance
with the terms thereof, pursuant to which the Owner assigns to the Lender all
of its right, title and interest in, to and under the Purchase Agreement to
secure its obligations under the Loan Agreements.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in New York, New York, or in the city and state
where the Trustee's principal offices are located, are authorized or are
obligated by law, executive order or governmental decree to be closed.
"Chevron" means Chevron Corporation, a Delaware.
"Chevron Guarantee" means the guarantee of the obligations of the
Initial Charterer under the Initial Charter given by Chevron.
"Closing Date" means _________ __, 1994.
"Collateral" means (i) an assignment of the Initial Charter, (ii) a
mortgage on the Vessel, (iii) an assignment of the earnings and insurances on
the Vessel, (iv) an assignment of the Chevron Guarantee, (v) an assignment of
the Management Agreement relating to the Vessel, (vi) an assignment of the
Purchase Agreement, (vii) the pledge of the shares of the Owner by Owner's
shareholder and (viii) a blanket security interest on all of the assets of the
Owner now existing or hereafter created, together with all income and proceeds
thereof.
"Event of Default" means an Event of Default under Section 6.01 of the
Loan Agreements.
"Governmental Approval" means any authorization, consent, approval,
license, franchise, lease, ruling, permit, tariff, rate, certification,
exemption, filing or registration by or with any Governmental Authority
relating to the ownership of the Collateral or to the execution, delivery or
performance of the Loan Agreement or any Security Document.
"Governmental Authority" means the federal government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any other governmental entity with authority over the Owner
or operation of the Vessels.
"Indentures" means the Indenture, dated as of _________ 1, 1994 between
the Owner and the Trustee pursuant to which the Term Mortgage Notes will be
issued and the Indenture, dated as of _______ 1, 1994 between the Lender and
the Trustee pursuant to which the Serial Mortgage Notes will be issued.
"Issue of One Debenture" means each Issue of One Debenture between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner grants to the Lender a security
interest in all of its assets.
"Law" means any statute, law, rule, regulation, ordinance, order, code,
policy or rule of common law, now or hereafter in effect, and any judicial or
administrative interpretation thereof by a Governmental Authority or
otherwise, including any judicial or administrative order, consent decree or
judgment.
"Lender" means California Petroleum Transport Corporation, a corporation
organized under the laws of the State of Delaware.
"Loan Agreements" means, collectively, the Term Loan Agreement and the
Serial Loan Agreement.
"Loans" means, collectively, the Serial Loans and the Term Loans.
"Loss Date" means the date which is 90 days after the occurrence of a
Total Loss of the Vessel.
"Management Agreement" means the agreement, dated the Closing Date,
among the Owner, the Manager and the Technical Adviser.
"Manager" means the Person performing the duties of the Manager under the
Management Agreement, initially P.D. Gram & Co. ans.
"Mortgage" means, with respect to the Vessel, the first preferred ship
mortgages on the Vessel granted by the Owner to the Lender, as amended from
time to time in accordance with the terms of such Mortgage.
"Owner" means CalPetro Tankers (Bahamas I) Limited, a company organized
under the laws of The Commonwealth of the Bahamas.
"Payment Date" means each ________ and ______________ commencing
___________ 1995.
"Person" means an individual, a partnership, a corporation, a joint
venture, an unincorporated association, a joint-stock company, a trust, or
other entity or a government or any agency or political subdivision thereof.
"Purchase Agreement" means the Vessel Purchase Agreement, dated as of
_________________, between the Owner and the Seller wherein the Owner
purchases the Vessel from the Seller.
"Registration Jurisdiction" means the jurisdiction in which the Vessel
is or will be registered.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or partnership agreement or other organizational or
governing documents of such Person, and, any Law applicable to or binding upon
such Person or any of its properties or to which such Person or any of its
properties is subject.
"Securities" means, collectively, the Term Mortgage Notes and the Serial
Mortgage Notes.
"Security Documents" means the Serial Loan Agreement, the Term Loan
Agreement, the Mortgage, the Assignment of Charter, the Assignment of Earnings
and Insurances, the Assignment of Guarantee, the Assignment of Management
Agreement, the Assignment of Purchase Agreement, the Issue of One Debenture,
collectively.
"Seller" means Chevron Transport Corporation, a Liberian corporation.
"Serial Loan Agreement" the Loan Agreement, dated as of _________ 1,
1994 between the Lender and the Owner pursuant to which the Lender will make
the Serial Loans to the Owner.
"Serial Loans" shall have the meaning assigned to such term in the
Preliminary Statement of this Assignment.
"Serial Mortgage Notes" means the Serial First Preferred Term Mortgage
Notes which will mature serially from _____________, 1995 to _____________,
2005 in the initial aggregate amount of $168,500,000 issued by the Lender
concurrently with the issuance of the Term Mortgage Notes.
"Serial Obligations" means the payment, performance or obligations of
any kind or nature whatsoever of the Owner under and pursuant to the Serial
Loan Agreement, any Security Document and any instrument, agreement or
document referred to therein.
"State" means any state of the United States of America and, in
addition, the District of Columbia.
"Technical Adviser" means the person performing the duties of the
Technical Adviser under the Management Agreement, initially Barber Ship
Management Group.
"Term Loan" shall have the meaning assigned to such term in the
Preliminary Statement of this Assignment.
"Term Loan Agreement" means the Loan Agreement, dated as of __________
1, 1994 between the Owner and the Lender pursuant to which the Lender makes
the Term Loan to the Owner.
"Term Mortgage Notes" means __% First Preferred Mortgage Notes Due 2014
in the initial aggregate amount of $117,900,000 issued by the Lender
concurrently with the issuance of the Serial Mortgage Notes.
"Term Obligations" means the payment, performance or obligations of any
kind or nature whatsoever of the Owner under and pursuant to the Term Loan
Agreement, any Security Document and any instrument, agreement or document
referred to therein.
"Trustee" means Chemical Trust Company of California.
"Vessel" shall have the meaning assigned to such term in the Preliminary
Satement of this Assignment.
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report
dated February 25, 1994, except as to the restated earnings per share amounts
included under the caption "Selected Financial Data of Chevron" of this Form
S-3, which is as of May 11, 1994, relating to the financial statements of
Chevron Corporation included in its Annual Report on Form 10-K for the year
ended December 31, 1993. Such report is included in Chevron's Current Report
on Form 8-K, dated October 28, 1994. We also consent to the incorporation by
reference of our report on the Financial Statement Schedules which appears on
page 35 of Chevron Corporation's 1993 Annual Reports on Form 10-K. We also
consent to the reference to us under the heading "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
San Francisco, California
November 3, 1994
Exhibit 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the Prospectus constituting
part of this Registration Statement on Form S-3 of our report dated February
15, 1994, relating to the combined balance sheets of the Caltex Group of
Companies as of December 31, 1993 and 1992 and the related combined statements
of income, retained earnings and cash flows and related supporting schedules
for each of the years in the three year period ended December 31, 1993, which
report appears in Chevron Corporation's Annual Report on Form 10-K for the
year ended December 31, 1993. We also consent to the reference to our firm
under the heading "Experts" in such Prospectus.
KPMG PEAT MARWICK LLP
Dallas, Texas
November 3, 1994
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Forms S-3, S-1 and F-1 of our report dated September
30, 1994, relating to the balance sheet of California Petroleum Transport
Corporation, which appears in such Prospectus. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE
Boston, Massachusetts
November 2, 1994
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Forms S-3, S-1 and F-1 of our reports dated
September 30, 1994, relating to the balance sheets of CalPetro Tankers
(Bahamas I) Limited; CalPetro Tankers (Bahamas II) Limited; CalPetro Tankers
(Bahamas III) Limited and CalPetro Tankers (IOM) Limited, which appear in such
Prospectus. We also consent to the reference to us under the heading
"Experts" in such Prospectus.
/s/ Price Waterhouse
PRICE WATERHOUSE
Chartered Accountants
Douglas
Isle of Man
British Isles
November 2, 1994
[LETTERHEAD OF McKINNEY, BANCROFT & HUGHES]
CALIFORNIA PETROLEUM TRANSPORT CORP.
1633 Broadway
New York, NY 10019
U.S.A.
COMMENT OF BAHAMIAN ATTORNEYS
We hereby consent to the use in the Prospectus constituting part of
this Registration Statement on Forms F-1 and S-1 of this firm's name
in the form and context in which the same appears.
/s/ McKINNEY, BANCROFT & HUGHES
McKINNEY, BANCROFT & HUGHES
Nassau, New Providence
The Bahamas
[LETTERHEAD OF CAINS ADVOCATES & NOTARIES]
October 28, 1994
California Petroleum Transport Corporation
c/o Thacher Proffit & Wood
Two World Trade Center
New York
NY 10048
Dear Sirs,
We hereby consent to the use in the Prospectus constituting part
of this Registration Statement on Form S-1, Form S-3 and Form F-1 of this
firm's name in the form and context in which the same appears.
Yours faithfully,
/s/ CAINS
CAINS
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, Chevron Corporation, a Delaware corporation (the
"Corporation"), contemplates filing with the Securities and Exchange
Commission at Washington, D.C., under the provisions of the Securities Act of
1933, as amended, and the regulations promulgated thereunder, a Registration
Statement on Form S-3 (and amendments thereto, including post-effective
amendments).
WHEREAS, the undersigned is an officer or director, or both, of the
Corporation.
NOW, THEREFORE, the undersigned hereby constitutes and appoints MALCOLM
J. McAULEY, HILMAN P. WALKER, TERRY MICHAEL KEE and BENJAMIN M. VANDEGRIFT, or
any of them, his or her attorneys-in-fact and agents, with full power of
substitution and resubstitution, for such person and in his or her name, place
and stead, in any and all capacities, to sign the aforementioned Registration
Statement (and any and all amendments thereto, including post-effective
amendments) and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully as to all intents and
purposes he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitutes,
may lawfully do and cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 3rd day of November, 1994.
/s/ Kenneth T. Derr
___________________
Kenneth T. Derr
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, Chevron Corporation, a Delaware corporation (the
"Corporation"), contemplates filing with the Securities and Exchange
Commission at Washington, D.C., under the provisions of the Securities Act of
1933, as amended, and the regulations promulgated thereunder, a Registration
Statement on Form S-3 (and amendments thereto, including post-effective
amendments).
WHEREAS, the undersigned is an officer or director, or both, of the
Corporation.
NOW, THEREFORE, the undersigned hereby constitutes and appoints MALCOLM
J. McAULEY, HILMAN P. WALKER, TERRY MICHAEL KEE and BENJAMIN M. VANDEGRIFT, or
any of them, his or her attorneys-in-fact and agents, with full power of
substitution and resubstitution, for such person and in his or her name, place
and stead, in any and all capacities, to sign the aforementioned Registration
Statement (and any and all amendments thereto, including post-effective
amendments) and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully as to all intents and
purposes he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitutes,
may lawfully do and cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 3rd day of November, 1994.
/s/ J. Dennis Bonney
_____________________
J. Dennis Bonney
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, Chevron Corporation, a Delaware corporation (the
"Corporation"), contemplates filing with the Securities and Exchange
Commission at Washington, D.C., under the provisions of the Securities Act of
1933, as amended, and the regulations promulgated thereunder, a Registration
Statement on Form S-3 (and amendments thereto, including post-effective
amendments).
WHEREAS, the undersigned is an officer or director, or both, of the
Corporation.
NOW, THEREFORE, the undersigned hereby constitutes and appoints MALCOLM
J. McAULEY, HILMAN P. WALKER, TERRY MICHAEL KEE and BENJAMIN M. VANDEGRIFT, or
any of them, his or her attorneys-in-fact and agents, with full power of
substitution and resubstitution, for such person and in his or her name, place
and stead, in any and all capacities, to sign the aforementioned Registration
Statement (and any and all amendments thereto, including post-effective
amendments) and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully as to all intents and
purposes he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitutes,
may lawfully do and cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 3rd day of November, 1994.
/s/ James N. Sullivan
_____________________
James N. Sullivan
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, Chevron Corporation, a Delaware corporation (the
"Corporation"), contemplates filing with the Securities and Exchange
Commission at Washington, D.C., under the provisions of the Securities Act of
1933, as amended, and the regulations promulgated thereunder, a Registration
Statement on Form S-3 (and amendments thereto, including post-effective
amendments).
WHEREAS, the undersigned is an officer or director, or both, of the
Corporation.
NOW, THEREFORE, the undersigned hereby constitutes and appoints MALCOLM
J. McAULEY, HILMAN P. WALKER, TERRY MICHAEL KEE and BENJAMIN M. VANDEGRIFT, or
any of them, his or her attorneys-in-fact and agents, with full power of
substitution and resubstitution, for such person and in his or her name, place
and stead, in any and all capacities, to sign the aforementioned Registration
Statement (and any and all amendments thereto, including post-effective
amendments) and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully as to all intents and
purposes he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitutes,
may lawfully do and cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 3rd day of November, 1994.
/s/ Martin R. Klitten
_____________________
Martin R. Klitten
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, Chevron Corporation, a Delaware corporation (the
"Corporation"), contemplates filing with the Securities and Exchange
Commission at Washington, D.C., under the provisions of the Securities Act of
1933, as amended, and the regulations promulgated thereunder, a Registration
Statement on Form S-3 (and amendments thereto, including post-effective
amendments).
WHEREAS, the undersigned is an officer or director, or both, of the
Corporation.
NOW, THEREFORE, the undersigned hereby constitutes and appoints MALCOLM
J. McAULEY, HILMAN P. WALKER, TERRY MICHAEL KEE and BENJAMIN M. VANDEGRIFT, or
any of them, his or her attorneys-in-fact and agents, with full power of
substitution and resubstitution, for such person and in his or her name, place
and stead, in any and all capacities, to sign the aforementioned Registration
Statement (and any and all amendments thereto, including post-effective
amendments) and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully as to all intents and
purposes he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitutes,
may lawfully do and cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 3rd day of November, 1994.
/s/ Donald G. Henderson
_______________________
Donald G. Henderson
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, Chevron Corporation, a Delaware corporation (the
"Corporation"), contemplates filing with the Securities and Exchange
Commission at Washington, D.C., under the provisions of the Securities Act of
1933, as amended, and the regulations promulgated thereunder, a Registration
Statement on Form S-3 (and amendments thereto, including post-effective
amendments).
WHEREAS, the undersigned is an officer or director, or both, of the
Corporation.
NOW, THEREFORE, the undersigned hereby constitutes and appoints MALCOLM
J. McAULEY, HILMAN P. WALKER, TERRY MICHAEL KEE and BENJAMIN M. VANDEGRIFT, or
any of them, his or her attorneys-in-fact and agents, with full power of
substitution and resubstitution, for such person and in his or her name, place
and stead, in any and all capacities, to sign the aforementioned Registration
Statement (and any and all amendments thereto, including post-effective
amendments) and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully as to all intents and
purposes he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitutes,
may lawfully do and cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 3rd day of November, 1994.
/s/ Samuel H. Armacost
______________________
Samuel H. Armacost
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, Chevron Corporation, a Delaware corporation (the
"Corporation"), contemplates filing with the Securities and Exchange
Commission at Washington, D.C., under the provisions of the Securities Act of
1933, as amended, and the regulations promulgated thereunder, a Registration
Statement on Form S-3 (and amendments thereto, including post-effective
amendments).
WHEREAS, the undersigned is an officer or director, or both, of the
Corporation.
NOW, THEREFORE, the undersigned hereby constitutes and appoints MALCOLM
J. McAULEY, HILMAN P. WALKER, TERRY MICHAEL KEE and BENJAMIN M. VANDEGRIFT, or
any of them, his or her attorneys-in-fact and agents, with full power of
substitution and resubstitution, for such person and in his or her name, place
and stead, in any and all capacities, to sign the aforementioned Registration
Statement (and any and all amendments thereto, including post-effective
amendments) and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully as to all intents and
purposes he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitutes,
may lawfully do and cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 3rd day of November, 1994.
/s/ Sam Ginn
_____________
Sam Ginn
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, Chevron Corporation, a Delaware corporation (the
"Corporation"), contemplates filing with the Securities and Exchange
Commission at Washington, D.C., under the provisions of the Securities Act of
1933, as amended, and the regulations promulgated thereunder, a Registration
Statement on Form S-3 (and amendments thereto, including post-effective
amendments).
WHEREAS, the undersigned is an officer or director, or both, of the
Corporation.
NOW, THEREFORE, the undersigned hereby constitutes and appoints MALCOLM
J. McAULEY, HILMAN P. WALKER, TERRY MICHAEL KEE and BENJAMIN M. VANDEGRIFT, or
any of them, his or her attorneys-in-fact and agents, with full power of
substitution and resubstitution, for such person and in his or her name, place
and stead, in any and all capacities, to sign the aforementioned Registration
Statement (and any and all amendments thereto, including post-effective
amendments) and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully as to all intents and
purposes he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitutes,
may lawfully do and cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 3rd day of November, 1994.
/s/ Carla A. Hills
___________________
Carla A. Hills
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, Chevron Corporation, a Delaware corporation (the
"Corporation"), contemplates filing with the Securities and Exchange
Commission at Washington, D.C., under the provisions of the Securities Act of
1933, as amended, and the regulations promulgated thereunder, a Registration
Statement on Form S-3 (and amendments thereto, including post-effective
amendments).
WHEREAS, the undersigned is an officer or director, or both, of the
Corporation.
NOW, THEREFORE, the undersigned hereby constitutes and appoints MALCOLM
J. McAULEY, HILMAN P. WALKER, TERRY MICHAEL KEE and BENJAMIN M. VANDEGRIFT, or
any of them, his or her attorneys-in-fact and agents, with full power of
substitution and resubstitution, for such person and in his or her name, place
and stead, in any and all capacities, to sign the aforementioned Registration
Statement (and any and all amendments thereto, including post-effective
amendments) and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully as to all intents and
purposes he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitutes,
may lawfully do and cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 3rd day of November, 1994.
/s/ Charles M. Pigott
______________________
Charles M. Pigott
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, Chevron Corporation, a Delaware corporation (the
"Corporation"), contemplates filing with the Securities and Exchange
Commission at Washington, D.C., under the provisions of the Securities Act of
1933, as amended, and the regulations promulgated thereunder, a Registration
Statement on Form S-3 (and amendments thereto, including post-effective
amendments).
WHEREAS, the undersigned is an officer or director, or both, of the
Corporation.
NOW, THEREFORE, the undersigned hereby constitutes and appoints MALCOLM
J. McAULEY, HILMAN P. WALKER, TERRY MICHAEL KEE and BENJAMIN M. VANDEGRIFT, or
any of them, his or her attorneys-in-fact and agents, with full power of
substitution and resubstitution, for such person and in his or her name, place
and stead, in any and all capacities, to sign the aforementioned Registration
Statement (and any and all amendments thereto, including post-effective
amendments) and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully as to all intents and
purposes he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitutes,
may lawfully do and cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 3rd day of November, 1994.
/s/ Condoleezza Rice
_____________________
Condoleezza Rice
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, Chevron Corporation, a Delaware corporation (the
"Corporation"), contemplates filing with the Securities and Exchange
Commission at Washington, D.C., under the provisions of the Securities Act of
1933, as amended, and the regulations promulgated thereunder, a Registration
Statement on Form S-3 (and amendments thereto, including post-effective
amendments).
WHEREAS, the undersigned is an officer or director, or both, of the
Corporation.
NOW, THEREFORE, the undersigned hereby constitutes and appoints MALCOLM
J. McAULEY, HILMAN P. WALKER, TERRY MICHAEL KEE and BENJAMIN M. VANDEGRIFT, or
any of them, his or her attorneys-in-fact and agents, with full power of
substitution and resubstitution, for such person and in his or her name, place
and stead, in any and all capacities, to sign the aforementioned Registration
Statement (and any and all amendments thereto, including post-effective
amendments) and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully as to all intents and
purposes he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitutes,
may lawfully do and cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 3rd day of November, 1994.
/s/ S. Bruce Smart, Jr.
________________________
S. Bruce Smart, Jr.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, Chevron Corporation, a Delaware corporation (the
"Corporation"), contemplates filing with the Securities and Exchange
Commission at Washington, D.C., under the provisions of the Securities Act of
1933, as amended, and the regulations promulgated thereunder, a Registration
Statement on Form S-3 (and amendments thereto, including post-effective
amendments).
WHEREAS, the undersigned is an officer or director, or both, of the
Corporation.
NOW, THEREFORE, the undersigned hereby constitutes and appoints MALCOLM
J. McAULEY, HILMAN P. WALKER, TERRY MICHAEL KEE and BENJAMIN M. VANDEGRIFT, or
any of them, his or her attorneys-in-fact and agents, with full power of
substitution and resubstitution, for such person and in his or her name, place
and stead, in any and all capacities, to sign the aforementioned Registration
Statement (and any and all amendments thereto, including post-effective
amendments) and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully as to all intents and
purposes he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitutes,
may lawfully do and cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 3rd day of November, 1994.
/s/ George H. Weyerhaeuser
__________________________
George H. Weyerhaeuser
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, Chevron Corporation, a Delaware corporation (the
"Corporation"), contemplates filing with the Securities and Exchange
Commission at Washington, D.C., under the provisions of the Securities Act of
1933, as amended, and the regulations promulgated thereunder, a Registration
Statement on Form S-3 (and amendments thereto, including post-effective
amendments).
WHEREAS, the undersigned is an officer or director, or both, of the
Corporation.
NOW, THEREFORE, the undersigned hereby constitutes and appoints MALCOLM
J. McAULEY, HILMAN P. WALKER, TERRY MICHAEL KEE and BENJAMIN M. VANDEGRIFT, or
any of them, his or her attorneys-in-fact and agents, with full power of
substitution and resubstitution, for such person and in his or her name, place
and stead, in any and all capacities, to sign the aforementioned Registration
Statement (and any and all amendments thereto, including post-effective
amendments) and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully as to all intents and
purposes he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitutes,
may lawfully do and cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 3rd day of November, 1994.
/s/ John A. Young
__________________
John A. Young
Exhibit
CERTIFICATION
CHEVRON CORPORATION
EXECUTIVE COMMITTEE
RESOLVED: That the execution by any necessary persons (either personally
or by a duly appointed attorney-in-fact) and the filing with the Securities
and Exchange Commission on behalf of the Corporation of a Registration
Statement on Form S-3 substantially in the form presented to this meeting but
with such changes therein and additions thereto as may be approved by such
executing persons, together with any exhibits, amendments or supplements
thereto as may be necessary or proper, and providing, among other things, for
the issuance by California Petroleum Transport Corporation ("California
Petroleum") of Serial First Preferred Mortgage Notes (the "Serial Notes"),
which will be payable by California Petroleum from charterhire payments to be
made by Chevron Transport Corporation ("Chevron Transport") and guaranteed by
the Corporation under bareboat charters relating to four oil tankers (the
"Charters"), are hereby approved; and be it further
RESOLVED: That the execution by any necessary persons (either personally
or by a duly appointed attorney-in-fact) and the filing with the Securities
and Exchange Commission on behalf of the Corporation of a Registration
Statement on Form S-3 substantially in the form presented to this meeting but
with such changes therein and additions thereto as may be approved by such
executing persons, together with any exhibits, amendments or supplements
thereto as may be necessary or proper, and providing, among other things, for
the issuance of Chevron Transport's obligations under the Charters and the
Corporation's guarantee of such obligations (collectively, the "Chevron
Obligations"), which are intended to fund certain payments of principal of and
interest on California Petroleum's ____% First Preferred Mortgage Notes Due
2014 (the "Term Notes") are hereby approved; and be it further
RESOLVED: That the Vice President and Chief Financial Officer, the Vice
President and Treasurer and the Assistant Treasurer, Financing and Strategy
(the "Authorized Officers"), and each of them, are authorized to execute and
deliver on behalf of the Corporation a trust indenture and an underwriting
agreement in connection with the issuance of the Serial Notes and the Chevron
Obligations, in each case in such form as may be approved by the Authorized
Officer executing and delivering the same, such execution and delivery being
conclusive evidence of such approval; and be it further
RESOLVED: That it is desirable and in the best interest of the
Corporation that the Serial Notes and the Chevron Obligations be qualified or
registered for sale in various states; that any officer of the Corporation is
authorized to determine the states in which appropriate action shall be taken
to qualify or register for sale all or such part of the Serial Notes and the
Chevron Obligations as such officer may deem advisable; that such officer is
hereby authorized to perform on behalf of the Corporation any and all such
acts as such officer may deem necessary or advisable in order to comply with
the applicable laws of any such states, and in connection therewith to execute
and file all requisite papers and documents, including, but not limited to,
applications, reports, surety bonds, irrevocable consents and appointments of
attorneys for service of process; and the execution by such officer of any
such paper or document or the doing by such officer of any act in connection
with the foregoing matters shall conclusively establish such officer's
authority therefor from the Corporation and the approval and ratification by
the Corporation of the papers and documents so executed and the action so
taken; and be it further
RESOLVED: That all actions heretofore taken on behalf of the Corporation
by any Authorized Officer or other officer of the Corporation in connection
with the transactions contemplated by the foregoing resolutions are hereby
approved and ratified; and be it further
RESOLVED: That any Authorized Officer is authorized to execute and
deliver on behalf of the Corporation all such documents and to take all such
actions as such Authorized Officer shall deem necessary or desirable in
connection with the transactions contemplated by the foregoing resolutions.
I, M. J. McAULEY, Secretary of Chevron Corporation, a Delaware
corporation, do hereby certify that the foregoing is a full, true and correct
copy of certain resolutions of the Executive Committee of said Corporation
unanimously adopted at a meeting of said Committee held at the office of said
corporation in San Francisco, California, on October 20, 1994, and that said
resolutions are in full force and unrevoked.
WITNESS my hand and the seal of said corporation this 1st day of
November, 1994.
By: /s/ M.J. McAuley
-------------------------
M.J. McAuley
Secretary
[Seal of Chevron Corporation]
Exhibit 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________
FORM T-1
Statement of Eligibility and Qualification Under the
Trust Indenture Act of 1939 of a Corporation
Designated to Act as Trustee
__________________________
CHEMICAL TRUST COMPANY OF CALIFORNIA
(Exact name of trustee as specified in its charter)
CALIFORNIA 94-2926573
(State of incorporation (I. R. S. employer
if not a national bank) Identification No.)
50 California Street
San Francisco, California 94111
(Address of principal executive offices) (Zip Code)
__________________________
CALIFORNIA PETROLEUM TRANSPORT CORPORATION
(Exact name of obligor as specified in its charter)
DELAWARE 04-3232976
(State or other jurisdiction of (I. R. S. employer
incorporation or organization) identification No.)
c/o J H Management Corporation
Room 6/9, One International Place
Boston, Massachusetts 02110-2624
(Address of principal executive offices) (Zip Code)
__________________________
Serial First Preferred Mortgage Notes
Maturing Serially from 1995 to 2005
(Title of the indenture securities)
1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Superintendent of Banks of the State of California, 235
Montgomery Street, San Francisco, CA 94104-2980.
Board of Governors of the Federal Reserve System,
Washington, D.C. 20511, by Federal Reserve Bank of San
Francisco, 101 Market Street, San Francisco, CA 94105.
(b) Whether it is authorized to exercise corporate trust powers.
Yes
2. Affiliations with Obligor and Underwriters.
If the obligor or any underwriter for the obligor is an affiliate of the
trustee, describe each such affiliation.
No such affiliation with the Obligor or Underwriter.
(Item 2 is at the date hereof based upon incomplete information but is
believed to be correct and may be considered to be complete unless
modified by an amendment to this Form T-1).
16. List of Exhibits.
Exhibit 1. Restated Articles of Incorporation of the Trustee as
Now in Effect. (See Statement of Eligibility on Form
T-1, File No. 22-25982,
Item 16, Exhibit 1)
Exhibit 2. Certificate of Authority of the Trustee to Commence
Business.
Exhibit 3. Authorization of the Trustee to Exercise Corporate
Trust Powers (Contained in
Exhibit 2).
Exhibit 4. Existing By-Laws of the Trustee. (See
Statement of Eligibility on Form T-1, File No.
22-25982, Item 16, Exhibit 4)
Exhibit 5. Copy of Each Indenture Referred to in Item 4.
Exhibit 6. Consent of the Trustee.
Exhibit 7. Report of Condition of the Trustee.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Chemical Trust Company of California, a corporation organized and
existing under the laws of the State of California, has duly caused this
statement of eligibility and qualification to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of San Francisco, and
State of San Francisco, on the 3rd day of November, 1994.
CHEMICAL TRUST COMPANY OF CALIFORNIA
By: /S/ Rose T. Maravilla
_____________________________
Rose T. Maravilla
Assistant Vice President
Exhibit 1. Restated Articles of Incorporation of the Trustee as now in
Effect.
(See Statement of Eligibility on Form T-1, File No.
22-25982, Item 16, Exhibit 1)
Exhibit 2. Certificate of Authority of the Trustee to Commence
Business.
No. 1476
STATE OF CALIFORNIA
STATE BANKING DEPARTMENT
Whereas, after due examination it appears that Chemical Trust Company of
California having its principal place of business in the City and County of
San Francisco, State of California, has complied with all the provisions of
the Banking Law of the State of California, and with all other necessary
requirements of law relating thereto;
Now Therefore, I, the undersigned, Superintendent of Banks of the State
of California, do certify that said bank is qualified and is hereby authorized
to transact a trust banking business at 50 California Street in the City and
County of San Francisco, State of California.
In Testimony Whereof witness my hand and Seal this 9th day of April,
1992 at San Francisco, California.
/JAMES E. GILLERAN
Superintendent of Banks
State of California
(Seal of Superintendent of Banks
of the State of California)
Exhibit 3. Authorization of the Trustee to Exercise Corporate Trust
Powers.
(Contained in Exhibit 2.)
Exhibit 4. Existing By-laws of the Trustee.
(See Statement of Eligibility on Form T-1, File No.
22-25982, Item 16, Exhibit 4)
Exhibit 5. Copy of Existing Indentures.
None.
Exhibit 6. Consent of the Trustee
Chemical Trust Company of California hereby consents in accordance with
the provisions of Section 321(b) of the Trust Indenture Act of 1939, that
reports of examinations by Federal, State, Territorial and District
Authorities may be furnished by such authorities to the Securities and
Exchange Commission upon its request therefor.
CHEMICAL TRUST COMPANY OF CALIFORNIA
By:/s/ Rose T. Maravilla
_____________________________
Rose T. Maravilla
Assistant Vice President
Exhibit 7. Report of Condition of the Trustee.
TRUST COMPANY
Consolidated Report of Condition of "Chemical Trust Company of California"
(Legal Title)
Located at San Francisco San Francisco CA 94111
(City) (County) (State) (Zip)
as of close of business on September 30 , 1994 Bank No. 1476