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the ------ day of ----

e, and capital employed, at the end of any accountby the Charterer on the ------ day of ing period, be carried forward into the next --------------, 19...

accounting period; such profits being subject UNITED STATES OF AMERICA,

to distribution at the end of each account

ing period as herein provided. DEPARTMENT OF COMMERCE,

(b) The Charterer agrees to make prelimi. (Maritime Administration)

nary payments to the Owner on account of By: -----

such additional charter hire at such time (CORPORATE SEAL)

and in such manner and amounts as may

be required by the Owner; provided, howAttest:

ever, that such payment of additional By: ------

charter hire shall be deemed to be prelimi.

nary and subject to adjustment either at Secretary

the time of the rendition of preliminary PART II-GENERAL PROVISIONS

statements or upon the completion of each

Anal audit by the Owner, at which times A. Charter hire and bond

such payments will be made to the Owner OLAUBE 1. Basto charter hire. The Char as such preliminary statements or final audit terer shall pay to the Owner the basic charter may show to be due, or such overpayments hire at the monthly rate provided for in Part refunded to the Charterer as may be reI hereof from the day and hour of delivery quired. of the Vessel until and including the day OLAUSE 3. Bond. The Charterer, at or be. and hour of redelivery to the Owner pur. fore delivery of each Vessel under this Agreesuant to the terms of this Agreement; or if ment, shall furnish the Owner with a bond any Vessel shall be lost, hire shall continue with suficient surety, in the amount speciuntil the time of such loss, if known, or if fied in Part I hereof, such bond to be apthe time of loss be uncertain, then up to proved by the Owner, both as to form and and including the time last heard from. sufficiency of the sureties, and to be condiPayment of such basic charter hire shall be tioned upon the true and faithful performmade to the Owner at Washington, D. O., on ance of all and singular the covenants and delivery of each Vessel for the remainder of agreements of the Charterer contained in the calendar month in which delivery 18 this Agreement, including, but not limited made, and thereafter monthly in advance to, the Charterer's obligation to pay charter of the first day of each month.

hire and damages and to indemnity against CLAUSE 2. Additional charter hire. (a) 11,

llens. The Charterer may, in lieu of furnishat the end of the calendar year in which this agreement becomes effective, or any subse

Ing such bond, pledge United States Governquent calendar year or at the termination

ment securities in the par value of the reof this Agreement, the cumulative net voyage

quired amount under an agreement satisfacprofit (after the payment of the basic

tory in form and substance to the Owner. charter bire hereinabove specified and pay B. Condition of Vessel (8) Equipment and. ment of the Charterer's fair and reasonable

Stores overhead expenses applicable to operation of the Vessel(s)) shall exceed 10 per centum

CLAUSE 4. Condition of vessel(s) on de.. per annum on the Charterer's capital neces

livery. Each Vessel on delivery shall be in sarily employed in the business of the Ves Class A-1 American Bureau of Shipping or sel(s) (all as hereinafter defined), the Char

equivalent, with all required certificates, interer shall pay over to the Owner at Wash

cluding but not limited to marine Inspecington, D. C., within thirty (80) days after tion certificates of the Coast Guard, Treasthe end of such year or other period, as

ury Department, and so far as due diligenceadditional charter hire for such year or

can make her so, tight, staunch, strong and other period, an amount equal to one-ball of well and suficiently tackled, appareled, such cumulative net voyage profit in excess furnished and equipped, and in every respect of 10 per centum per annum on the Char seaworthy and in good running condition terer's capital necessarily employed in the and repair, with clean swept holds and in business of the Vessel(s). Such cumulative all respects fit for service. net profit so accounted for shall not be in CLAUSE 5. Surveys. (a) Each Vessel shall cluded in any calculation of cumulative net be jointly surveyed before delivery and be. profit in any subsequent year or period. fore redelivery under this Agreement to de

For purposes of calculating "cumulative termine and state the condition of the Vesnet voyage proat" It is agreed by the parties sel. Such surveys shall include drydocking that at the end of each accounting period to determine and state the condition of the any net voyage losses and/or any unearned underwater parts, unless, at Owner's opt portion of the aforesaid allowable return the drydocking in connection with delivery of 10% per annum on capital necessarily em is postponed, in which event the cost and ployed, may be carried forward into the time (including Vessel expenses) of any next accounting period, but that in no event damage to underwater parts found either shall profts in excess of 10% per annum on upon delivery or during the period of the

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Vessel's use under this Agreement shall be for Owner's account unless such damage is established, from the basis of all evidence, to have occurred during the period of the Vessel's use under this Agreement. The cost and time of such delivery survey shall be for account of the Owner, and similarly the cost and time of such redelivery survey shall be for the account of the Charterer. Each party shall bear the cost of surveyors appointed by it in connection with both delivery and redelivery surveys.

(b) Except as to items sighted prior to delivery and noted on the delivery survey report as defective, which shall be for the Owner's account, including cost and time (inclusive of Vessel expenses) the delivery of each Vessel by the owner and the acceptance thereof by the Charterer shall constitute full performance by the owner of all the Owner's obligations under this Clause with respect to such Vessel, and thereafter the Charterer shall not be entitled to make or assert any claim against the Owner on account of any agreements, representations or warranties, expressed or implied with respect to the condition of such Vessel: provided. however. that the Owner shall nevertheless be responsible for the cost and time (exclusive of Vessel expenses) of repairs or renewals occasioned by latent defects in such Vessel, ber machinery or appurtenances or defects due to locked-in stresses in such Vessel existing at the time of delivery, not recoverable under the terms and conditions of the American

form of policy (American Institute Time (Hulls) December, 1955) containing no deductible average clause.

CLAUSE 6. Determination of class. For the purpose of this Agreement a Vessel chartered hereunder shall be deemed to be in class, whether or not any requirements or recommendations of the Classification Society are outstanding at the time of delivery or redelivery, as the case may be, unless the time limit for the accomplishment of any such requirements or recommendations, including any extension or period of grace allowed, shall bave expired.

CLAUSE 7. Inventory. A complete inventory of each Vessel's entire outit, equipment, furniture, furnishings, appliances, spare and replacement parts and of all unbroached consumable stores, subsistence stores, slop chest, containers, and bunker fuel shall be Jointly taken and mutualy agreed upon as to items and quantities, at the time of delivery, by representatives of the Charterer and the Owner. The parties may agree, however, to accept any suitable prior inventory which may have been taken before the delivery of the Vessel under this Agreement. Such de. livery Inventory of consumable and subsist. ence stores. slop chest. containers, and bunker fuel shall be priced by the Charterer at the current market price prevalling at the port and time of delivery. At redelivery & complete inventory of each Vessel's entire outfit, equipment, furniture, furnishings, appliances and spare and replacement parts

shall, also, be jointly taken and mutually agreed upon as to items and quantities by representatives of the Charterer and the Owner. In addition, a complete inventory of all broached and unbroached consumablo stores, subsistence stores, slop chest. containers, and bunker fuel shall be taken by the Charterer immediately prior to redelivery. Such inventory shall be priced by tho Charterer at the current market price prevailing at the port and time of performance of Charterer's redelivery obligations, and the Owner shall be furnished with three certified copies of such inventory, together with an affidavit certifying as to its correctness,

CLAUSE 8. Consumable stores and fuel. The Charterer shall accept and pay for any unbroached consumable stores, subsistence stores, slop chest, returnable containers, and bunker fuel furnished by the Owner or on board at the time of delivery at the market prices current at the time and place of repairs and outfitting. The Owner shall have no obligation upon redelivery to accept or pay for consumable stores (either broached or unbroached), subsistence stores, slop chest, or returnable containers, and shall accept and pay for bunker fuel only in such minimum amounts as the Owner may determine. (Bunkers accepted by the Owner shall be paid for at the current market price prevali. ing at the port and time of redelivery, or, in event of redelivery at a Reserve Fleet site, at the current market price at the port and time of redelivery repairs.) Prior to redelivery, such items shall be removed from the Vessels by the Charterer in accordanco with the provisions of NBA Order No. 64, as revised from time to time, and the fair and reasonable cost of such removal shall be charged in the Vessel's voyage accounts for the last voyage prior to redelivery. With respect to the aforesaid Items, there shall be taken into account in the determination of additional charter hire, in accordance with Clause 2, Part II, of this Agreement, (a) the current market value thereof at the port and time of redelivery, in the event redelivery is effected at a redelivery port, or, in the event redelivery is effected at & Reserve Fleet site, the current market value at the port and time of redelivery repairs, or (b) the net proceeds from the disposition thereof. in the event the Charterer elects to dispose of the removed goods and notifies the Owner of such intention prior to redelivery. The manner of, time of and determination of net proceeds from such disposition of the items shall be subject to approval of the Owner.

CLAUSE 9. Use of equipment. The Char. terer shall have the use of all outfit, equipment, furniture, furnishings, appliances, spare and replacement parts on board the Vessel at the time of delivery under this Agreement without extra cost and the same shall be returned to the Owner upon redelivery in good order and condition. Any such items damaged or 80 worn in service as to be unfit for use or lost or destroyed shall be replaced or made good by the Charterer

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in kind at or before redelivery, or at Owner's option, the Charterer shall pay for said items at the current market prices at the port and time of performance of Charterer's redelivery obligations, based upon the condition of the items at the time of delivery. The Owner shall have a right, but not an obligation, to accept any overages on the Vessel at redellyery. Any overages accepted by the Owner shall be paid for at the current market prices at the port and time of performance of Charterer's redelivery obligations, based upon the condition of the items at the time of redelivery. Overage and shortage statements shall be prepared and priced by the Charterer, subject to review and adjustment by the Owner.

CLAUSE 10. Maintenance. The Charterer, except as otherwise provided in Clause 4, shall, at its own expense, maintain each Vessel, her machinery, bollers, appurtenances, and spare parts during the period of the Vessel's use under this Agreement in good state of repair and in eficient operating condition and in accordance with good commercial maintenance practices and shall keep each Vessel in such condition as will entitle the Owner at all times to all required Certificates, including, without limitation, the highest classification and rating for vessels of the same age and type in the American Bureau of Shipping and with unexpired marine inspection certificates of the Coast Guard. Treasury Department.

CLAUSE 11. Structural changes. The Charterer shall make no structural changes in the Vessel(s) and shall make no changes in the machinery, boilers, appurtenances or spare parts thereof, without in each instance first securing the written approval of the Owner.

CLAUSE 12. Drydocking. The Charterer shall drydock each Vessel and clean and paint the underwater parts, when necessary, but not less than once in about every nine (9) months from date of delivery. The Charterer shall give the Owner reasonable notice of the time and place of drydocking and 11 practicable ifteen (15) days in advance thereof and afford the Owner an opportunity to inspect the Vessel(s) while drydocked. The Charterer shall also promptly notify tho Owner suficiently in advance to enable its representative to be present at repairs or surveys of the Vessel(8), and shall furnish the Owner with copies of reports made pur. suant to such surveys.

CLAUSE 13. Inspections. The owner shall have the right at any time, without notice, to inspect or survey the Vessels at its own expense, to ascertain their condition and to satisfy Itselt that the Vessels are being properly repaired and maintained in accordance with good commercial maintenance practices, but such inspections shall be held at such time and in such manner as to not interfere with Vessels' schedule. The Charterer shall make all such repairs, at its own expense, as such inspection or survoy may

show to be required in compliance with tho Charterer's obligations under this Agreement. The Charterer shall also permit the Owner to inspect the Vessels' logs whenever requested, and shall furnish the Owner upon request with full information regarding any casualties or other accidents or damage to the Vessels.

CLAUSE 14. Redelivery of vessel(s)-(a) Port or place of redelivery. The port of redelivery shall be the port of delivery or such other port as may be mutually agreed, Provided, that the Owner shall have the option of requiring the Charterer to place the Vessel(s) in layup at a Reserve Fleet site designated by the owner, on the same coast as the port of redelivery, in the manner and on the basis provided for in subparagraph (d) of this Clause. In the event the Owner exercises this option, the Owner shall havo the right to designate the port at which Charterer's redelivery obligations under this Clause will be performed.

(b) Redelivery conditions. Each Vessel, unless lost, shall be redelivered to the Owner, pursuant to the terms of this Agreement, in the same good order and condition as that in which she was delivered, unless the lack of good order and condition is due solely to ordinary wear and tear, and with valid classif. cation and Coast Guard certificates, whether or not classification or Coast Guard repairs are due wholly or in part to ordinary wear and tear. At the redelivery survey provided for in Clause 6, surveyors appointed by the Charterer and surveyors appointed by the Owner, shall be present, who shall determine and state the repairs or work necessary to place each Vessel on the date of redelivery in the condition and class required under this Clause, which findings shall include all repairs and work required to be performed at the time of redelivery by the Classification Society and all other regulatory bodies, and all repairs and work which are necessary to place each Vessel on the date of redelivery in the good order and condition required by this Clause. The Charterer, before redellyery, shall make all such repairs and do all such work so found to be necessary at its expense and time, or at Owner's option, the Charterer shall, on Owner's request, discharge such obligation by payment to the owner of an amount sufficient to place each Vessel in such class, order and condition and to provide for the foregoing work and repairs at the prices current at the time of redelivery, which amount shall also include compensation at the rate of basic hire payable under this Agreement for the time reasonably required under then existing conditions to complete such work or repairs and compensation for all other expenses, (including insurance) ressonably required incident to such work or repairs. In the event the Owner exercises this option, the Charterer's redelivery repair obligations shall be limited to the amount of Marine Hull and Machinery Insurance required by the provisions of Part I hereof. The Charterer shall not be required to make

any repairs which were for Owner's account exclusive possession, control and command under Clause 4 of this Agreement, but if such of the Vessel(s) during the entire period of repairs were made after delivery under this use under this Agreement. Agreement and paid for by the Owner, they CLAUSE 16. Owner's representatives. The shall be considered as having been made at Charterer agrees that, at its expense, it will the time of delivery for the purpose of deter furnish transportation on each Vessel, durmining the Charterer's obligations under this ing the period of this Agreement, for not. Clause 14.

more than five oficers and/or employees of (c) Disputes. Should any dispute arise the Federal Maritime Board-Maritime Adbetween the Owner and the Charterer with ministration, travelling on official business, respect to responsibility for repairs, renew who shall be given full, free and complete als, replacements, or condition of the access at all reasonable times to all parts of Vessel(s), at the time of redelivery, the Char such Vessel, and shall have full opportunity terer shall, without prejudice to its con to observe and inspect the working of such tentions, make and pay for such disputed vessel in all of its parts, but without any repairs, renewals, or replacements, or any directing or controlling power over such part thereof, before redelivery, and may re Vessel's operations. The Charterer also cover the cost from the Owner, together agrees to cooperate with such representatives with Vessel expenses and charter hire during in the making of any inspection or investi. the period required for the performance of gation which the Owner may deem desirable, such work over and above the time required and to prepare and furnish full and complete to perform the Charterer's redelivery re reports, records or other data pertaining to pairs, in event Owner's llability therefor is such Vessel's operation, as requested by the established.

Owner. It is mutually understood and (d) Vessel layup. In the event that the agreed that the transportation of such Owner exercises its option under subpara Owner's representatives, shall be on the basis graph (a) of this clause to require the of not more than one round-trip per calenCharterer to place the Vessel(s) in layup dar year per Vessel, upon the written request following completion of Charterer's normal of the Maritime Administrator. redelivery obligations, the Charterer shall CLAUSE 17. Employment of affiliates, etc.; perform and pay for all work required in rental of office space. (a) Unless granted an connection with the preparation for layup exemption upon such terms and conditions and movement of the vessel(s) to the Re and for such specific period of time as the Berve Fleet site designated by the Owner, as Owner shall determine pursuant to Section prescribed in NSA Order No. 64, as revised 803 of the Act, the Charterer shall not emfrom time to time. In such event, (1) basic ploy any person or concern performing or charter hire shall cease as of completion of supplying Stevedoring. ship-repair, shipCharterer's normal redelivery obligations, and chandler, towboat, or kindred services to (11) all reasonable costs incurred by the supply such services to the chartered Charterer during the period of the stripping Vessel(s) if the Charterer or any subsidiary and layup of the Vessel(s) as aforesaid, in. company, holding company, afiliate comcluding but without limitation, cost of in. pany, or associate company of the Charterer, surance, shall, to the extent authorized and or any officer, director, or employee of the approved by the owner, be taken into Charterer, such subsidiary company, holding account as voyage expense in the de company, affiliate company, or associate termination of additional charter hire under

company of the Charterer, or any member of

the immediate family of the Charterer, or of Clause 2.

such officer, director, or employee of the O. Operation of the Vessel(s)

Charterer, or any member of the

immediate family of any officer, director, or CLAUSE 15. Charterer to man, etc. During

employee of such subsidiary company, holdthe period of this Agreement, the Charterer

ing company, affliate company, or associate shall, at its own expense, and by its own pro company of the Charterer owns any pecunicurement, man, victual, navigate, operate, ary interest, directly or indirectly, in the persupply, fuel and, except as otherwise ex son or concern supplying such services to the pressly provided in Clause 4 of this Agree chartered Vessel, or receives any payment or ment, repair each Vessel and pay all charges other things of value, directly or indirectly, and expenses of every kind and nature what as a result of such employment of services. soever incident to the use and operation of (b) Without prior approval of the Owner the Vessel(s) under this Agreement. The granted upon such terms and conditions as Owner reserves the right to require the re the Owner may prescribe, the Charterer shall moval of the Master(s) or the Chief En. not rent office space owned by the Charterer gineer(s) if it shall have reason to be or by any subsidiary, holding company, amlidissatisfied with their conduct or if it con ate or associate company of the Charterer. siders their employment to be prejudicial or by any officer, director, or employee of the to the interests of the United States. Ex Charterer, or any member of the immediate cept as otherwise expressly provided in this family of the Charterer, or of such officer, Clause and Clause 40 of this Agreement, the director, or employee of the Charterer, or any Charterer and not the Owner shall have member of the immediate family of any on

cer, director, or employee of such subsidiary, with another carrier or carriers by water, or holding company, affiliate, or associate com to engage in any practice in concert with pany of the Charterer.

another carrier or carriers by water, which is CLAUSE 18. Efficient operation. The Char unjustly discriminatory or unfair to any terer agrees to conduct its business and its other citizen of the United States who operoperations with respect to each Vessel in an ates a common carrier by water exclusively economical and efficient manner.

employing vessels registered under the laws CLAUSE 19. Use of United States goods. of the United States on any established trade Whenever practicable, the Charterer shall use route from and to a United States port or only articles, materials, and supplies of the ports. growth, production, and manufacture of the CLAUSE 24. Libels. Neither the Charterer United States, as defined in Section 506 (2) nor the Master of the Vessel(s) nor any other of the Act, except when it is necessary to person shall have the right, power, or authorpurchase supplies and equipment outside the ity to create, incur, or permit to be placed United States to enable & Vessel to continue upon the Vessel(s) any liens whatsoever other and complete a voyage, and the Charterer than for crews wages or salvage. The Charshall perform repairs to the Vessel(s) within terer agrees to carry a properly certified copy the continental limits of the United States, of this Agreement with the ship's papers on except in an emergency.

board each Vessel and agrees to exhibit the CLAUSE 20. Development of American-flag same to any person having business with merchant marine. The Charterer shall co such Vessel and agrees also to exhibit the operate with the Owner and with other same to any representative of the Owner on American-flag companies in the development demand. of the American-flag merchant marine as a The Charterer agrees to notify any person whole, and, whenever practicable, the Char furnishing repairs, supplies, towage, or other terer shall favor American-flag companies in necessaries to the Vessel(s) that neither the transshipping of cargo, in selecting foreign Charterer nor the Master has any right to domestic agents or other representatives, and create, incur, or permit to be imposed upon in the rental of terminal and other facilities the Vessel(s) any liens whatsoever, except and in related matters.

for crew's wages and salvage. Such notice CLAUSE 21. Services rendered vessel(s). as far as may be practicable shall be in writ. The Charterer, I and when requested by the ing. The Charterer further agrees to fasten Owner, shall Ale with the Owner rates and in each Vessel in & conspicuous place, and schedules covering any servcies rendered the to maintain during the charter period, & Vessel(s) under this Agreement by any in notice reading as follows: dividual, firm or corporation.

This Vessel is the property of the United CLAUSE 22. No transfer or assignment. The

States of America. It is under charter to Charterer shall not, without the Owner's written or telegraphic consent, sell, trans and by the terms of the charter neither the ter, or assign this Agreement or any interest Charterer nor the Master has any right, therein, or time charter or subcharter the

power, or authority to create, incur, or perVessel(s), or make any arrangement whereby

mit to be imposed upon the Vessel any llen the maintenance, management, or operation

whatsoever, except for crew's wages and of the Vessel(s) is to be performed by any salvage. other person. CLAUSE 23. Preference and conference agree

The Owner shall indemnity and hold harmments. (a) The Charterer shall not unjustly

less and defend the Charterer against any discriminate in any manner so as to give pret

liens, claims or liabilities of whatsoever na. erence, directly or indirectly, in respect to

ture upon the Vessel(s) at the time of decargo in which the Charterer has a direct or

livery under this Agreement. The Charterer indirect ownership or purchase or vending

shall indemnify and hold harmless and deinterest. If the Charterer carries any cargo

fend the Owner against any lens of whatsoon its own behalf or for its own account or on

ever nature upon the Vessel(8) and against behalf or for the account of any associate,

any claims against the Owner arising out of afiliate, susidlary, parent or holding com

the operation of the Vessel(s) by the Charpany, the Charterer shall not discriminate in

terer, or out of any act or neglect of the 1ts own favor, or in favor of any such asso

Charterer, in relation to the Vessel(s) or the clate, affliate, subsidiary, holding or parent

operation thereof, except insofar as such liens company, in regard to rates charged or service or claims arise out of any matter covered by rendered. The Charterer shall also hold con the insurance procured and in force, as profidential and shall not reveal to any such vided herein. If a libel should be filed associate, affiliate, subsidiary, holding or

against the Vessel(s) or if the Vessel(s) 18/are parent company any information whatso

otherwise levied against or taken in custody ever, except such information as is generally

by virtue of legal proceedings in any court made available to the public in the regular course of the steamship business in regard

because of any llens or claims arising out of to cargo of similar kind or nature which the

the operation of the Vessel (s) by the CharCharterer may at any time carry for any other

terer, the Charterer shall at its own expense interests or otherwise.

within fiteen (15) days thereof cause the (b) The Charterer agrees not to continue Vessel(s) to be released and the len to bo as a party to or to conform to any agreement discharged.

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