Common use of Operation of the Vessel Clause in Contracts

Operation of the Vessel. The Shipowner shall not (unless otherwise required by any military authority of the United States and except during a Government Use (1) cause or permit the Vessel to be operated in any manner contrary to law or to any lawful rules or regulations of the Maritime Administration, or (2) unless there has been an actual or constructive total loss or an agreed or compromised total loss of the Vessel, abandon the Vessel in any foreign port. (l) Concerning Section 2.02(h). Section 2.02(h) is deleted and the following substituted in lieu thereof: (i) Material Changes in the Vessel. After the Delivery Date of the Vessel, the Shipowner shall not make, or permit to be made, any material change in the general dimensions or characteristics of the Vessel which changes the capacity of the Vessel to perform as originally intended by the Construction Contract, unless the Shipowner shall have received the Secretary's prior written consent thereto. (m) Concerning Section 2.03(a). Section 2.03(a) is hereby amended as follows: (a) The Construction Contract shall be maintained in full force and effect insofar as it relates to the due performance by the Shipowner and the Shipyard of all their respective obligations thereunder and the Shipowner shall not, without the Secretary's prior written consent, amend, modify, assign or terminate the Construction Contract or consent to any change in the Construction Contract which releases the Shipyard from its obligations to comply with the provisions of the Construction Contract or any applicable laws, treaties, conventions, rules and regulations; provided that, the Secretary's prior written consent shall not be necessary, but prompt written notice to the Secretary shall be given for (1) any mandatory or regulatory change to the Construction Contract as a result of any requirements of any governmental agency, or (2) any non-mandatory changes that Shipyard and Shipowner desire to make which do not exceed, with respect to any item of the Vessel's construction, two (2%) percent of the Actual Cost and which do not, in the aggregate, cause the Actual Cost to be increased more than five (5%) percent or the delivery and completion date of the Vessel to be extended more than fifteen (15) days. Notwithstanding the foregoing, no change shall be made in the general dimensions and/or characteristics of the Vessel which changes the capacity of the Vessel to perform as originally intended by the Construction Contract without the Secretary's prior written consent. The Secretary will nonetheless retain its authority to review work done under a change order to ascertain whether the work should be included in Actual Cost and whether the price charged is fair and reasonable. No Advances may be made for work that is not determined to be includable in Actual Cost. (n) Concerning Section 2.03. A new subsection (c) is hereby added to Section 2.03 and reads as follows:

Operation of the Vessel. (a) The Shipowner Borrower shall procure that the Vessel is managed by the Technical Manager pursuant to the Technical Management Agreement and shall not, without the prior written consent of the Agent (which shall not be unreasonably withheld), change or allow the change of the technical management of the Vessel. (unless otherwise required by any military authority b) The Borrower shall procure that each of the Technical Manager and the Commercial Manager signs, executes and deliver a manager’s undertaking in such form as the Agent (on behalf of the Finance Parties) reasonably may require. (c) The Borrower shall, and shall procure that the Technical Manager shall, comply, or procure the compliance in all material respects with the ISM Code and the ISPS Code, all Environmental Laws, all Sanction Laws, the laws of the Approved Ship Registry, the United States Oil Pollution Act of 1990 and except during a Government Use (1) cause all other laws or permit regulations relating to the Vessel, their ownership, operation and management or to the business of the Borrower and the Technical Manager and shall not employ the Vessel to be operated nor allow their employment: (i) in any manner contrary to law or regulation in any relevant jurisdiction including but not limited to the ISM Code; and (ii) in the event of hostilities in any lawful rules or regulations part of the Maritime Administrationworld (whether war is declared or not), in any zone which is declared a war zone by any government or by the war risk insurers of the Vessel unless the Borrower have (2at their own expense) unless there effected any special, additional or modified insurance cover which shall be necessary or customary for first class unit owners within the territorial waters of such country at such time and has been an actual or constructive total loss or an agreed or compromised total loss provided evidence of such cover to the Agent. Without limitation to the generality of this Clause 23.8 (Operation of the Vessel), abandon the Vessel in any foreign port. (l) Concerning Section 2.02(h). Section 2.02(h) is deleted Borrower and the following substituted in lieu thereof: (i) Material Changes in the Vessel. After the Delivery Date Technical Manager shall comply or procure compliance, with, as applicable, all requirements of the VesselInternational Convention for the Safety of Life at Sea (SOLAS) of 1974 as adopted, amended or replaced from time to time including, but not limited to, the Shipowner ISM Code or the ISPS Code. The Vessel shall not make, or permit to be made, under any material change in the general dimensions or characteristics of the Vessel which changes the capacity of the Vessel to perform as originally intended by the Construction Contract, unless the Shipowner shall have received the Secretary's prior written consent theretocircumstances carry any nuclear waste/material. (m) Concerning Section 2.03(a). Section 2.03(a) is hereby amended as follows: (a) The Construction Contract shall be maintained in full force and effect insofar as it relates to the due performance by the Shipowner and the Shipyard of all their respective obligations thereunder and the Shipowner shall not, without the Secretary's prior written consent, amend, modify, assign or terminate the Construction Contract or consent to any change in the Construction Contract which releases the Shipyard from its obligations to comply with the provisions of the Construction Contract or any applicable laws, treaties, conventions, rules and regulations; provided that, the Secretary's prior written consent shall not be necessary, but prompt written notice to the Secretary shall be given for (1) any mandatory or regulatory change to the Construction Contract as a result of any requirements of any governmental agency, or (2) any non-mandatory changes that Shipyard and Shipowner desire to make which do not exceed, with respect to any item of the Vessel's construction, two (2%) percent of the Actual Cost and which do not, in the aggregate, cause the Actual Cost to be increased more than five (5%) percent or the delivery and completion date of the Vessel to be extended more than fifteen (15) days. Notwithstanding the foregoing, no change shall be made in the general dimensions and/or characteristics of the Vessel which changes the capacity of the Vessel to perform as originally intended by the Construction Contract without the Secretary's prior written consent. The Secretary will nonetheless retain its authority to review work done under a change order to ascertain whether the work should be included in Actual Cost and whether the price charged is fair and reasonable. No Advances may be made for work that is not determined to be includable in Actual Cost. (n) Concerning Section 2.03. A new subsection (c) is hereby added to Section 2.03 and reads as follows:

Operation of the Vessel. (a) The Shipowner Borrower shall procure that the Vessel is managed by the Technical Manager pursuant to the Technical Management Agreement and the Commercial Manager pursuant to the Commercial Management Agreement and shall not, without the prior written consent of the Agent (which shall not be unreasonably withheld), change or allow the change of the technical or commercial management of the Vessel, such consent always being subject to the execution by the relevant manager of a letter of undertaking in respect of its duties under the relevant management agreement and the subordination of claims for payment thereunder, in terms and form acceptable to the Agent. (unless otherwise required by any military authority b) The Borrower shall procure that each of the Technical Manager and the Commercial Manager signs, executes and deliver a manager’s undertaking in such form as the Agent (on behalf of the Finance Parties) may require. (c) The Borrower shall, and shall procure that the Technical Manager shall, comply, or procure the compliance in all material respects with the ISM Code and the ISPS Code, all Environmental Laws, all Sanction Laws, the laws of the Approved Ship Registry, the United States Oil Pollution Act 1990 and except during a Government Use (1) cause all other laws or permit regulations relating to the Vessel, their ownership, operation and management or to the business of the Borrower and the Technical Manager and shall not employ the Vessel to be operated nor allow their employment: (i) in any manner contrary to law or regulation in any relevant jurisdiction including but not limited to the ISM Code; and (ii) in the event of hostilities in any lawful rules or regulations part of the Maritime Administrationworld (whether war is declared or not), in any zone which is declared a war zone by any government or by the war risk insurers of the Vessel unless the Borrower have (2at their own expense) unless there effected any special, additional or modified insurance cover which shall be necessary or customary for first class unit owners within the territorial waters of such country at such time and has been an actual or constructive total loss or an agreed or compromised total loss provided evidence of such cover to the Agent. Without limitation to the generality of this Clause 23.8 (Operation of the Vessel), abandon the Vessel in any foreign port. (l) Concerning Section 2.02(h). Section 2.02(h) is deleted Borrower and the following substituted in lieu thereof: (i) Material Changes in the Vessel. After the Delivery Date Technical Manager shall comply or procure compliance, with, as applicable, all requirements of the VesselInternational Convention for the Safety of Life at Sea (SOLAS) 1974 as adopted, amended or replaced from time to time including, but not limited to, the Shipowner ISM Code or the ISPS Code. The Vessel shall not make, or permit to be made, under any material change in the general dimensions or characteristics of the Vessel which changes the capacity of the Vessel to perform as originally intended by the Construction Contract, unless the Shipowner shall have received the Secretary's prior written consent theretocircumstances carry any nuclear waste/material. (m) Concerning Section 2.03(a). Section 2.03(a) is hereby amended as follows: (a) The Construction Contract shall be maintained in full force and effect insofar as it relates to the due performance by the Shipowner and the Shipyard of all their respective obligations thereunder and the Shipowner shall not, without the Secretary's prior written consent, amend, modify, assign or terminate the Construction Contract or consent to any change in the Construction Contract which releases the Shipyard from its obligations to comply with the provisions of the Construction Contract or any applicable laws, treaties, conventions, rules and regulations; provided that, the Secretary's prior written consent shall not be necessary, but prompt written notice to the Secretary shall be given for (1) any mandatory or regulatory change to the Construction Contract as a result of any requirements of any governmental agency, or (2) any non-mandatory changes that Shipyard and Shipowner desire to make which do not exceed, with respect to any item of the Vessel's construction, two (2%) percent of the Actual Cost and which do not, in the aggregate, cause the Actual Cost to be increased more than five (5%) percent or the delivery and completion date of the Vessel to be extended more than fifteen (15) days. Notwithstanding the foregoing, no change shall be made in the general dimensions and/or characteristics of the Vessel which changes the capacity of the Vessel to perform as originally intended by the Construction Contract without the Secretary's prior written consent. The Secretary will nonetheless retain its authority to review work done under a change order to ascertain whether the work should be included in Actual Cost and whether the price charged is fair and reasonable. No Advances may be made for work that is not determined to be includable in Actual Cost. (n) Concerning Section 2.03. A new subsection (c) is hereby added to Section 2.03 and reads as follows:

Operation of the Vessel. (a) The Shipowner Borrower shall procure that the Vessel is managed by the Technical Manager pursuant to the Technical Management Agreement and the Commercial Manager pursuant to the Commercial Management Agreement and shall not, without the prior written consent of the Agent (which shall not be unreasonably withheld), change or allow the change of the technical or commercial management of the Vessel, such consent always being subject to the execution by the relevant manager of a letter of undertaking in respect of its duties under the relevant management agreement and the subordination of claims for payment thereunder, in terms and form acceptable to the Agent. (unless otherwise required by any military authority b) The Borrower shall procure that each of the Technical Manager and the Commercial Manager signs, executes and deliver a manager’s undertaking in such form as the Agent (on behalf of the Finance Parties) may require. (c) The Borrower shall, and shall procure that the Technical Manager shall, comply, or procure the compliance in all material respects with the ISM Code and the ISPS Code, all Environmental Laws, all Sanction Laws, the laws of the Approved Ship Registry, the United States Oil Pollution Act 1990 and except during a Government Use (1) cause all other laws or permit regulations relating to the Vessel, their ownership, operation and management or to the business of the Borrower and the Technical Manager and shall not employ the Vessel to be operated nor allow their employment: (i) in any manner contrary to law or regulation in any relevant jurisdiction including but not limited to the ISM Code; and (ii) in the event of hostilities in any lawful rules or regulations part of the Maritime Administrationworld (whether war is declared or not), in any zone which is declared a war zone by any government or by the war risk insurers of the Vessel unless the Borrower have (2at their own expense) unless there effected any special, additional or modified insurance cover which shall be necessary or customary for first class unit owners within the territorial waters of such country at such time and has been an actual or constructive total loss or an agreed or compromised total loss provided evidence of such cover to the Agent. Without limitation to the generality of this Clause 24.8 (Operation of the Vessel), abandon the Vessel in any foreign port. (l) Concerning Section 2.02(h). Section 2.02(h) is deleted Borrower and the following substituted in lieu thereof: (i) Material Changes in the Vessel. After the Delivery Date Technical Manager shall comply or procure compliance, with, as applicable, all requirements of the VesselInternational Convention for the Safety of Life at Sea (SOLAS) 1974 as adopted, amended or replaced from time to time including, but not limited to, the Shipowner ISM Code or the ISPS Code. The Vessel shall not make, or permit to be made, under any material change in the general dimensions or characteristics of the Vessel which changes the capacity of the Vessel to perform as originally intended by the Construction Contract, unless the Shipowner shall have received the Secretary's prior written consent theretocircumstances carry any nuclear waste/material. (m) Concerning Section 2.03(a). Section 2.03(a) is hereby amended as follows: (a) The Construction Contract shall be maintained in full force and effect insofar as it relates to the due performance by the Shipowner and the Shipyard of all their respective obligations thereunder and the Shipowner shall not, without the Secretary's prior written consent, amend, modify, assign or terminate the Construction Contract or consent to any change in the Construction Contract which releases the Shipyard from its obligations to comply with the provisions of the Construction Contract or any applicable laws, treaties, conventions, rules and regulations; provided that, the Secretary's prior written consent shall not be necessary, but prompt written notice to the Secretary shall be given for (1) any mandatory or regulatory change to the Construction Contract as a result of any requirements of any governmental agency, or (2) any non-mandatory changes that Shipyard and Shipowner desire to make which do not exceed, with respect to any item of the Vessel's construction, two (2%) percent of the Actual Cost and which do not, in the aggregate, cause the Actual Cost to be increased more than five (5%) percent or the delivery and completion date of the Vessel to be extended more than fifteen (15) days. Notwithstanding the foregoing, no change shall be made in the general dimensions and/or characteristics of the Vessel which changes the capacity of the Vessel to perform as originally intended by the Construction Contract without the Secretary's prior written consent. The Secretary will nonetheless retain its authority to review work done under a change order to ascertain whether the work should be included in Actual Cost and whether the price charged is fair and reasonable. No Advances may be made for work that is not determined to be includable in Actual Cost. (n) Concerning Section 2.03. A new subsection (c) is hereby added to Section 2.03 and reads as follows: