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CAMBRIDGE FUND MANAGEMENT L.L.C., MANAGER
GOLDEN STATE PETRO (IOM I-A) PLC
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MANAGEMENT AGREEMENT
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This Management Agreement, dated as of December 1, 1996 (the
"Agreement"), between Golden State Petro (IOM I-A) PLC, a company organized
under the laws of the Isle of Man (the "Owner") and Cambridge Fund Management
L.L.C., a Delaware limited liability company organized under the laws of the
State of Delaware (the "Manager").
PRELIMINARY STATEMENT
The Owner is issuing first preferred mortgage notes (the
"Notes") to finance the construction of a very large crude carrier (the Vessel")
pursuant to a trust indenture (the "Indenture"), dated as of December 1, 1996,
by and among Golden State Petroleum Transport Corporation, as agent, the Owner,
Golden State Petro (IOM I-B) PLC and United State Trust Company of New York (the
"Indenture Trustee"), as indenture trustee. Concurrently herewith, the Owner is
entering into a bareboat charter (the "Initial Charter") with Chevron Transport
Corporation (the "Initial Charterer"). The Owner desires to engage the Manager
to provide management services for the Vessel and the Owner.
The Manager is willing to provide such services as to the
Owner pursuant to this Agreement upon the terms and subject to the conditions
set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and of other good and valuable consideration, the
receipt of which is hereby acknowledged, the Owner and the Manager hereby agree
as follows:
ARTICLE I
DEFINITIONS
Unless otherwise defined in Schedule 1 to this Agreement,
capitalized terms shall have the meanings assigned to such terms in the
Indenture.
ARTICLE II
ADMINISTRATIVE MANAGEMENT OF THE OWNER
Section 2.01 APPOINTMENT OF MANAGER AS MANAGER OF
ADMINISTRATIVE OBLIGATIONS OF OWNER. The Owner hereby appoints the Manager and
the Manager hereby accepts its appointment as manager of the administrative and
corporate obligations of the Owner.
Section 2.02 ADMINISTRATIVE RESPONSIBILITIES OF MANAGER. The
Manager hereby covenants and agrees with the Owner that the Manager shall or
shall cause its designee to do the following:
(i) maintain the books and records of the Owner;
(ii) prepare and file the annual financial statements and
annual tax returns of the Owner, if required;
(iii) provide all office staff and accommodation of the Owner;
(iv) prepare and submit invoices to the Owner or to the
Owner's assignee for the cost and expense of (A) recording the Mortgage under
the laws of the Registration Jurisdiction, (B) the annual corporate fees of the
Owner, (C) the annual fees of the officers and directors of the Owner, (D) the
annual premiums for directors and officers liability insurance for the directors
and officers of the Owner, if any, and (E) any other expenses properly incurred
on behalf of the Owner;
(v) on or prior to one (1) Business Day prior to a Payment
Date, determine and certify to the Indenture Trustee (A) the estimated Recurring
Fees for the Vessel which are then due and payable and (B) the estimated
Recurring Fees for the Vessel which will become due and payable on the next
succeeding Payment Date as contemplated by Section 3.3 of the Indenture;
(vi) pay any and all of the Recurring Fees pursuant to Section
3.3 of the Indenture; and
(vii) provide notice to the Indenture Trustee on or prior to
three (3) Business Days prior to each Installment Date.
ARTICLE III
ADMINISTRATIVE MANAGEMENT OF THE VESSEL
Section 3.01 APPOINTMENT OF MANAGER AS MANAGER OF THE VESSEL.
The Owner hereby appoints the Manager and the Manager hereby accepts its
appointment to act as administrative manager of the Vessel from and after the
date hereof to the date the Vessel is disposed of by the Owner or the Manager is
removed pursuant to Section 4.02.
Section 3.02 RESPONSIBILITIES OF THE MANAGER. From and after
the Closing Date, the Manager hereby covenants and agrees with the Owner that:
(a) From and after the Closing Date to the date of termination
of the Initial Charter pursuant to the provisions thereof, the Manager shall
monitor and enforce the performance by the Initial Charterer of its obligations
under and pursuant to the Initial Charter. Thereafter, if the Owner enters into
an Acceptable Replacement Charter or substitute charter, the Manager shall
monitor and enforce the performance by any subsequent charterer (a "Subsequent
Charterer") of its obligations under and pursuant to an Acceptable Replacement
Charter or substitute charter. In no event shall the Manager be responsible for
the costs and expenses incurred in connection with the enforcement of the
Initial Charter, any Acceptable Replacement Charter or substitute charter.
(b) The Manager shall review the insurance certificates
provided by the Initial Charterer (or Subsequent Charterer) pursuant to the
terms of the Initial Charter (or Acceptable Replacement Charter or substitute
charter) to determine whether such certificates comply with the terms of the
Initial Charter (or Acceptable Replacement Charter or substitute charter);
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PROVIDED, HOWEVER, that in no event shall the Manager be liable for the
placement of additional insurance on the Vessel or the payment or advancement of
any premiums or calls.
(c) The Manager shall handle and process any claims arising in
connection with the insurances of the Vessel in accordance with Clause 11 of the
Initial Charter (or the pertinent provisions of the Acceptable Replacement
Charter or substitute charter).
(d) The Manager shall review any and all assignments and
subcharters of the Vessel to determine if they meet the requirements of the
Initial Charter (or Acceptable Replacement Charter or substitute charter).
(e) The Manager shall review any and all approvals or consents
requested by the Initial Charterer (or Subsequent Charterer) pursuant to the
terms of the Initial Charter (or Acceptable Replacement Charter or substitute
charter) and advise the Owner or the Owner's assignee with respect to same.
(f) The Manager shall provide the services of such officers
and other staff of suitable skills and experience from among the members of the
staff of the Manager as may be necessary in order properly to perform the
services referred to herein.
(g) The Manager shall provide office equipment and the use of
accounting or computing equipment when and to the extent required and the
necessary executive, clerical and secretarial personnel for the performance of
the services herein set out.
(h) The Manager shall keep all books and records of things
done and transactions performed on behalf of the Owner.
Section 3.03 MANAGER TO ACT AS ATTORNEY-IN-FACT OF OWNER. The
Owner hereby constitutes the Manager, and its successors and assigns, its true
and lawful attorney, 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 execute
any and all documents, instruments, agreements and applications for and on
behalf of the Owner relating to or in connection with (i) the registration of
the Vessel under the laws of the Registration Jurisdiction, (ii) the monitoring
and enforcement of the terms and conditions of the Initial Charter (or
Acceptable Replacement Charter or substitute charter) and (iii) the performance
by the Owner of its obligations under the Initial Charter (or Acceptable
Replacement Charter or substitute charter) as the Manager may deem to be
necessary or advisable.
Section 3.04 MANAGER TO ACT AS OWNER'S REMARKETING AGENT. The
Owner hereby appoints and the Manager accepts appointment as the Owner's
exclusive marketing agent with respect to the sale and/or charter of the Vessel
on the terms and conditions set forth in this Agreement.
Section 3.05 MANAGER'S REMARKETING OBLIGATIONS. (a) The
Manager shall commence marketing of the Vessel upon receipt of written notice
(the "Commencement Notice") from the Owner stating that the Initial Charterer
has given the Owner notice of the Initial Charter's election not to renew the
Initial Charter. The Manager will obtain the services of
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brokers to assist it in its remarketing efforts. Among the brokers the Manager
may use (on a non-exclusive basis) are McQuilling Brokerage Partners, Inc. and
ACM Shipping Limited.
(b) The Manager shall promptly solicit bids for and advise the
Owner and the Indenture Trustee, as assignee of the Owner, as to the
availability of an Acceptable Replacement Charter.
(c) In the event that the Manager notifies the Indenture
Trustee, as assignee of the Owner, and the Owner that an Acceptable Replacement
Charter is commercially unavailable, then the Manager shall be directed by
notice in writing from the Owner or the Indenture Trustee, as assignee of the
Owner, to solicit bids for the sale of the Vessel.
(d) The Manager shall forward to the Indenture Trustee the
highest cash bid for the sale of such Vessel received after the receipt of the
Commencement Notice to the date which is one week prior to the next succeeding
principal payment date (the "Remarketing Period") that will, when added to the
Allocable Portion of the Debt Service Reserve Fund, at least equal the Allocated
Principal Amount of the Notes for such Vessel, plus interest accrued but unpaid
thereon; PROVIDED, HOWEVER, if there are no such bids, the Manager shall forward
to the Indenture Trustee all other cash bids received during the Remarketing
Period by the Manager for the sale of the Vessel. The Indenture Trustee shall
instruct the Manager whether or not to accept any such bid.
(e) In the event that there are no bids for the sale of the
Vessel or the Indenture Trustee instructs the Manager not to accept any bid for
the sale of the Vessel, then the Manager shall consult with the Owner and the
Indenture Trustee and shall attempt to recharter the Vessel upon such terms as
it shall, in its sole discretion, deem 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 payments on the Allocated Principal Amount
of the Notes for the Vessel, (B) pay Recurring Fees for the Vessel and the cost
of insurance not maintained by the Substitute Charterer under such substitute
charter, (C) pay the Management Fees for the Vessel and (D) pay the amount of
fees and expenses of the Indenture Trustee allocable to the Vessel.
(f) If the Manager is unable to obtain any bids for the
recharter of the Vessel, it shall promptly advise the Owner and the Indenture
Trustee and recommend what alternatives are available for the employment or
disposition of the Vessel.
Section 3.06 MANAGER'S ACTIVITIES ON BEHALF OF OWNER. In
connection with the performance of its services hereunder on behalf of the
Owner, the Manager shall not perform such services from an office or fixed place
of business in the United States within the meaning of sections 864 or 887(b)(4)
of the Code and shall use its best efforts to avoid treatment of the Owner as
being engaged in a trade or business in the United States or having any such
office or fixed place of business in the United States.
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ARTICLE IV
GENERAL PROVISIONS REGARDING
THE MANAGER
Section 4.01 NO DUTIES EXCEPT AS SPECIFIED IN AGREEMENT OR
INSTRUCTIONS. (a) The Manager shall not have any duty or obligation to manage,
make any payment in respect of, register, record, sell, repair, advance any
amounts in connection with the repair of, dispose of or otherwise deal with the
Vessel or any part thereof, or otherwise take or refrain from taking any action
under, or in connection with, any document contemplated hereby to which the
Manager is a party, except as expressly provided by the terms of this Agreement.
No implied duties or obligations shall be read into this Agreement against the
Manager.
(b) Under no circumstances shall the Manager be liable for (i)
the Owner's obligations under the Indenture, the Security Documents, the Initial
Charter or the indebtedness evidenced by the Notes or (ii) the validity or
sufficiency of the Indenture or any of the Security Documents. The Manager shall
not assume any liability, duty or obligation to any Person, other than as
expressly provided for herein.
(c) The Manager shall not have any duty to conduct any
affirmative investigation, other than as specifically set forth in this
Agreement, as to the Initial Charterer's (or Acceptable Replacement Charterer's
or Subsequent Charterer's) performance of its obligations under the Initial
Charter (or Acceptable Replacement Charter or substitute charter) or the
condition of the Vessel.
(d) No provision of this Agreement shall be construed to
relieve the Manager from liability for its own grossly negligent action, its own
grossly negligent failure to act or its own willful misconduct. The duties and
obligations of the Manager shall be determined solely by the express provisions
of this Agreement and the Manager shall not be liable except for the performance
of its duties and obligations as specifically set forth in this Agreement. No
implied covenants or obligations shall be read into this Agreement against the
Manager and, in the absence of bad faith on the part of the Manager, the Manager
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 Manager and conforming to the requirements of this Agreement.
(e) The Manager 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 or suffered or omitted by it hereunder in good faith
and in accordance with such advice or opinion of counsel.
(f) The right of the Manager to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the Manager
shall not be answerable for other than its gross negligence or willful
misconduct in the performance of such act, and the delivery hereunder to the
Manager of any notice, document or report shall not give rise to an affirmative
obligation on the part of the Manager to take any action with respect thereto,
except as otherwise expressly provided herein.
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Section 4.02 RESIGNATION OF MANAGER. The Manager may resign
its duties at any time upon 30 days prior written notice to the Owner and the
Indenture Trustee. The Manager may be removed by the Owner with or without cause
upon 30 days prior written notice to the Manager and the Indenture Trustee;
PROVIDED, HOWEVER, if the Owner removes the Manager without cause, the Manager
shall be entitled to receive the compensation described in Section 4.04(a)
hereof through the date which is 90 days after the receipt of such notice. In
the event of the resignation or removal of the Manager, a successor manager
shall be appointed by the Owner. The Owner shall give the Indenture Trustee
notice of the successor manager's acceptance of such appointment and shall cause
such successor to execute any and all documents requested by the Indenture
Trustee to evidence such successor's acceptance of all of the obligations of the
Manager pursuant to this Agreement. For the purposes of this Agreement, any
material breach of any material obligation of the Manager hereunder shall give
the Owner the right to remove the Manager with cause.
Section 4.03 INDEMNIFICATION. The Owner shall indemnify the
Manager and its successors and assigns, and hold them harmless against and from,
any and all liabilities, obligations, losses, damages, taxes, penalties, claims,
actions, suits, costs, expenses (including legal fees and expenses) of any kind
and nature whatsoever (collectively, "Expenses") which may be imposed on,
incurred by or asserted at any time against the Manager (whether or not
indemnified against by other parties) in any way relating to or arising out of
this Agreement, the Indentures or any Security Document; PROVIDED, HOWEVER, that
the Owner shall not be required to indemnify the Manager for Expenses arising or
resulting from its own willful misconduct or gross negligence.
Section 4.04 COMPENSATION. (a) For the first year of the term
of this Agreement, the Manager shall receive as compensation for its services
hereunder an amount equal to $50,000 per annum, payable semi-annually in arrears
on each Payment Date as provided in Section 3.3 of the Indenture.
(b) Whenever any payment to the Manager under this 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, unless such extension
would cause payment to be made in the next succeeding calendar month, in which
case such date shall be advanced to the next preceding Business Day.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01 AMENDMENT. This Agreement may be amended from
time to time by written agreement signed by the parties hereto upon the written
consent of the Indenture Trustee.
Section 5.02 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
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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 contained in this Agreement shall not
affect the remaining portions of this Agreement, 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 Manager, at the following address: Park Avenue
Tower, 65 Xxxx 00xx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000, (b) in the
case of the Owner, at the following address: 00-00 Xxxxx Xxxxxx, Xxxxxxx, Xxxx
of Man and (c) in the case of the Indenture Trustee, at the following address:
000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 Attention: Corporate Trust
Department, 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
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 5.05 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 5.06 NO DEMISE. Nothing herein contained shall be
construed as creating a demise of the Vessel to the Manager.
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 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 5.09 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 5.10 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 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.
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Section 5.11 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 5.12 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 Indenture;
(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 Indenture as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
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IN WITNESS WHEREOF, the Manager and the Owner have caused this
Indenture to be duly executed and delivered by their respective officers
thereunto duly authorized and their respective seals, duly attested, to be
hereunto affixed, all as of the day and year first above written.
CAMBRIDGE FUND MANAGEMENT L.L.C., as Manager
By:/s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Chief Financial Officer
GOLDEN STATE PETRO (IOM I-A) PLC, as Owner
By:/s/ Xxxxxx Xxxxxxxxx
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Name: Xxxxxx Xxxxxxxxx
Title: Treasurer
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS............................... 1
ARTICLE II
ADMINISTRATIVE MANAGEMENT OF THE OWNER.................. 1
Section 2.01 Appointment of Manager as Manager of Administrative
Obligations of Owner.......................................... 1
Section 2.02 Administrative Responsibilities of Manager.................... 1
ARTICLE III
ADMINISTRATIVE MANAGEMENT OF THE VESSEL................. 2
Section 3.01 Appointment of Manager as Manager of the Vessel............... 2
Section 3.02 Responsibilities of the Manager............................... 2
Section 3.03 Manager to Act as Attorney-in-Fact of Owner................... 3
Section 3.04 Manager to Act as Owner's Remarketing Agent................... 3
Section 3.05 Manager's Remarketing Obligations............................. 3
Section 3.06 Manager's Activities on Behalf of Owner....................... 4
ARTICLE IV
GENERAL PROVISIONS REGARDING
THE MANAGER............................... 5
Section 4.01 No Duties Except As Specified in Agreement or Instructions.... 5
Section 4.02 Resignation of Manager........................................ 6
Section 4.03 Indemnification............................................... 6
Section 4.04 Compensation.................................................. 6
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Page
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ARTICLE V
MISCELLANEOUS PROVISIONS......................... 6
Section 5.01 Amendment..................................................... 6
Section 5.02 Severability.................................................. 6
Section 5.03 Notices....................................................... 7
Section 5.04 Captions...................................................... 7
Section 5.05 Governing Law................................................. 7
Section 5.06 No Demise..................................................... 7
Section 5.07 No Partnership................................................ 7
Section 5.08 Counterparts.................................................. 7
Section 5.09 Survival...................................................... 7
Section 5.10 Integration................................................... 7
Section 5.11 Reproduction of Documents..................................... 8
Section 5.12 General Interpretive Principles............................... 8
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