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CALIFORNIA PETROLEUM TRANSPORT CORPORATION
and
CALPETRO TANKERS (BAHAMAS III) LIMITED
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ASSIGNMENT OF CHARTER
Dated as of March 31, 2006
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
ARTICLE II
ASSIGNMENT
Section 2.01 Security Interest ............................................. 1
Section 2.02 Assignment .................................................... 1
Section 2.03 Owner to Remain Liable ........................................ 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 ................... 5
Section 3.04 Governmental Approvals ........................................ 5
Section 3.05 Litigation .................................................... 5
Section 3.06 No Prior Assignment ........................................... 5
Section 3.07 The Charter ................................................... 5
ARTICLE IV
COVENANTS OF THE OWNER
Section 4.01 Consent of Charterer .......................................... 5
Section 4.02 Enforcement of Charter ........................................ 5
Section 4.03 Amendment of Charter; Assignment of Charter ................... 6
Section 4.04 Performance of Obligations .................................... 6
Section 4.05 Notices ....................................................... 6
Section 4.06 Further Assurances ............................................ 6
Section 4.07 Lender as Attorney-in-Fact of Owner ........................... 6
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01 Amendment ..................................................... 7
Section 5.02 Severability .................................................. 7
Section 5.03 Notices ....................................................... 7
Section 5.04 Consent to Jurisdiction ....................................... 7
Section 5.05 Captions ...................................................... 7
Section 5.06 Governing Law ................................................. 7
Section 5.07 No Partnership ................................................ 8
Section 5.08 Counterparts .................................................. 8
Section 5.09 Survival ...................................................... 8
Section 5.10 Integration ................................................... 8
Section 5.11 Reproduction of Documents ..................................... 8
Section 5.12 Successors and Assigns; Assignment ............................ 8
Section 5.13 General Interpretive Principles ............................... 8
Assignment of Charter, dated as of March 31, 2006 (the "Assignment"),
between California Petroleum Transport Corporation, a corporation organized
under the laws of the State of Delaware (the "Lender") and CalPetro Tankers
(Bahamas III) Limited, a company organized under the laws of The Commonwealth of
the Bahamas (the "Owner").
PRELIMINARY STATEMENT
The Owner has received from the Lender loans in the original aggregate
principal amount of $40,262,000.00 (the "Loans") pursuant to the Term Loan
Agreement dated as of April 1, 1995 (the "Term Loan Agreement") between the
Lender and the Owner, as borrower.
The net proceeds of the Loans were used by the Owner to acquire the
m.t. Virgo Voyager (ex-"XXXXXXX X. XXXXX") (the "Vessel") from Chevron Transport
Corporation (the "Initial Charterer"). The Initial Charterer has re-delivered
the Vessel to Owner, and the Owner has entered into that certain Bareboat
Charter dated March 31, 2006 (the "Charter") between the Owner and Front Voyager
Inc., as charterer (the "Charterer"). As collateral security for its obligations
under the Term Loan Agreement, the Owner has heretofore assigned, pledged,
mortgaged and granted the Lender a security interest in, inter alia, the Vessel,
the Initial Charter and the earnings and insurances of the Vessel, and is
obligated to assign, pledge, mortgage and grant the Lender a security interest
in the 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 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 Term Obligations.
Section 2.02 Assignment. In order to provide for the payment of and as
security for the Term Obligations 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 Charter,
including without limitation any moneys whatsoever payable to the Owner under
the Charter, together with the income and proceeds thereof and all other rights
and benefits whatsoever accruing to the Owner under the 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
Charter or this Assignment.
Section 2.03 Owner to Remain Liable.Anything in this Assignment
contained to the contrary notwithstanding, the Owner shall remain liable under
the 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.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.
(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.
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 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 Charter. The Charter constitutes the legal, valid and
binding obligation of the 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 Term
Obligations remains outstanding:
Section 4.01 Consent of Charterer. On the Closing Date, the Owner
shall deliver to the Charterer a copy of this Assignment and shall procure the
execution by the 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 Charter.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 Charter
and this Assignment.
(b) If an Event of Default shall occur under the Term 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 Charter shall be paid to the credit of JPMorgan
Chase Bank, N.A., ABA # 000000000 for credit to Acct. No. ###-##-####, Re:
California Petroleum Transport Corporation 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 Charter in connection with any default or alleged default by the 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 Charter by the Owner.
Section 4.03 Amendment of Charter; Assignment of Charter.The Owner
will not, except with the previous written consent of the Lender, agree to any
variation of the Charter or release the Charterer from any of its obligations
thereunder or waive any breach of the Charterer's obligations thereunder or
consent to any such act or omission of the Charterer as would otherwise
constitute such breach.
(b) The Owner will not, except with the previous written consent of
the Lender, assign the Charter to any other Person.
Section 4.04 Performance of Obligations. The Owner will perform its
obligations under the Charter and will use its best efforts to cause the
Charterer to perform its obligations under the Charter.
Section 4.05 Notices. The Owner will send a copy of all notices
received or given by it under the 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 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, Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000-0000, (b) in the case of the Owner, at the following address: x/x
XxXxxxxx, Xxxxxxxx & Xxxxxx, Xxxxxx House, 4 Xxxxxx Street, Nassau, Bahamas, 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 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, 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
electronic, digital, 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 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.
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: /s/ Xxxxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Treasurer
CALPETRO TANKERS (BAHAMAS III)
LIMITED, as Owner
By: /s/ Tor Olav Troim
--------------------------------
Name: Tor Olav Troim
Title: President
Exhibit A
LETTER OF ACKNOWLEDGMENT TO ASSIGNMENT OF CHARTER
March __, 2006
CALIFORNIA PETROLEUM TRANSPORT
CORPORATION, as Lender
X.X. XXXXXX TRUST COMPANY,
NATIONAL ASSOCIATION,
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 March
31, 2006, between CalPetro Tankers (Bahamas III) Limited (the "Owner") and
California Petroleum Transport Corporation (the "Lender") as adequate notice of
such assignment to the Lender of the Charter (as defined in the Assignment) and
of all the right, title and interest of the Owner in, to and under the Charter
and (ii) a signed copy of the Collateral Assignment of Charter (the "Collateral
Assignment"), dated as of March 31, 2006, between the Lender and X.X. Xxxxxx
Trust Company, National Association (the "Collateral Trustee") as adequate
notice of such further assignment to the Collateral Trustee of the Charter and
all of the right, title and interest of the Lender in, to and under the Charter.
So long as the Assignment remains effective, we hereby agree that (a)
upon notification to us of the occurrence of an Event of Default under the Term
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 the Collateral Trustee's Account at
JPMorgan Chase Bank, N.A., ABA # 000000000 for credit to Acct. No. ###-##-####,
regarding California Petroleum Transport Corporation, or otherwise to such other
account as you may at an time or from time to time, designate by notice to us in
writing and (b) with respect to each of the insurances, if any, obtained
pursuant to Clause 11 of the Charter, the Lender and the Collateral Trustee
shall, if possible, be named additional assureds.
Payments of moneys under the 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 Charter and all payment once made to you
will be final, and once paid we will not, for any reason whatsoever, seek to
recover from the Collateral Trustee 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 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 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 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 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.
FRONT VOYAGER INC., as 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 Charter 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 March 31, 2006.
"Event of Default' means an Event of Default under Section 6.01 of the
Term Loan Agreement.
"Front Voyager Inc." means Front Voyager Inc., a Liberian corporation.
"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.
"Charter" means with respect to each Vessel, the Bareboat Charter,
dated March 31, 2006, between the Charterer and the Owner.
"Charterer" means Front Voyager Inc., a Liberian corporation.
"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.
"Loans" means, collectively, the Term Loan.
"Loss Date" means the date which is 90 days after the occurrence of a
Total Loss of the Vessel.
"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 III) Limited, a company
organized under the laws of The Commonwealth of the Bahamas.
"Payment Date" means each April 1 and October 1, commencing April 1,
2006.
"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.
"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.
"Security Documents" means the Term Loan Agreement, the Mortgage, the
Assignment of Charter, the Assignment of Earnings and Insurances, the Assignment
of Management Agreement, the Assignment of Purchase Agreement, the Issue of One
Debenture, collectively.
"State" means any state of the United States of America and, in
addition, the District of Columbia.
"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 April 1,
1995 between the Owner and the Lender pursuant to which the Lender makes the
Term Loan to the Owner.
"Term Mortgage Notes" means 8.52 % First Preferred Mortgage Notes Due
2015 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 X.X. Xxxxxx Trust Company, National Association.
"Vessel" shall have the meaning assigned to such term in the
Preliminary Statement of this Assignment.
CHARTERER'S LETTER OF ACKNOWLEDGMENT
TO ASSIGNMENT OF CHARTER
March 31, 2006
CALIFORNIA PETROLEUM
TRANSPORT CORPORATION, as Lender
X.X. XXXXXX TRUST COMPANY,
NATIONAL ASSOCIATION, 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 March
31, 2006, between CalPetro Tankers (Bahamas III) Limited (the "Owner") and
California Petroleum Transport Corporation (the "Lender") as adequate notice of
such assignment to the Lender of the Charter (as defined in the Assignment) and
of all the right, title and interest of the Owner in, to and under the Charter
and (ii) a signed copy of the Collateral Assignment of Charter (the "Collateral
Assignment"), dated as of March 31, 2006, between the Lender and X.X. Xxxxxx
Trust Company, National Association (the "Collateral Trustee") as adequate
notice of such further assignment to the Collateral Trustee of the Charter and
all of the right, title and interest of the Lender in, to and under the Charter.
So long as the Assignment remains effective, we hereby agree that (a)
upon notification to us of the occurrence of an Event of Default under the Term
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 the Collateral Trustee's Account at
JPMorgan Chase Bank, N.A., ABA # 000000000 for credit to Acct. No. ###-##-####,
regarding California Petroleum Transport Corporation, or otherwise to such other
account as you may at an time or from time to time, designate by notice to us in
writing and (b) with respect to each of the insurances, if any, obtained
pursuant to Clause 11 of the Charter, the Lender and the Collateral Trustee
shall, if possible, be named additional assureds.
Payments of moneys under the 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 Charter and all payment once made to you
wi11 be final, and once paid we will not, for any reason whatsoever, seek to
recover from the Collateral Trustee 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 terns 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 to our knowledge 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 wi11
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 Charter.
The undersigned wi11 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.
FRONT VOYAGER INC., as Charterer
By: /s/ Xxx X. Xxxxxx
------------------------------
Name: Xxx X. Xxxxxx
Title: President & Director
