<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended August 31, 1998
[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
Commission file number: 000-24452
RMS TITANIC, INC.
-----------------
(Exact name of registrant as specified in its charter)
Florida 59-2753162
- -------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
17 Battery Place, Suite 203, New York, NY 10004
- ----------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 558-6300
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes No X
The number of shares outstanding of the registrant's common stock on
October 19, 1998 was 16,187,119.
<PAGE> 2
PAGE
NUMBER
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 12
PART II
OTHER INFORMATION
Item 1. Legal Proceedings 19
Item 2. Changes in Securities 20
Item 3. Defaults Upon Senior Securities 20
Item 4. Submission of Matters to a Vote of Security Holders 20
Item 5. Other Information 20
Item 6. Exhibits and Reports on Form 8-K 20
Signatures 21
2
<PAGE> 3
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
The financial statements of RMS Titanic, Inc. (the "Company") included
herein were prepared, without audit, pursuant to rules and regulations of the
Securities and Exchange Commission. Because certain information and notes
normally included in financial statements prepared in accordance with generally
accepted accounting principles were condensed or omitted pursuant to such rules
and regulations, these financial statements should be read in conjunction with
the financial statements and notes thereto included in the audited financial
statements of the Company for the year ended February 28, 1998 as included in
the Company's Form 8-K dated June 15, 1998.
3
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RMS TITANIC, INC.
BALANCE SHEET
================================================================================
<TABLE>
<CAPTION>
AUGUST 31, FEBRUARY 28,
1998 1998
(UNAUDITED)
ASSETS
- -------------------------------------------------------------------------------------------------------
Current Assets:
<S> <C> <C>
Cash and cash equivalents $ 1,763,678 $ 1,000,269
Accounts receivable 957,219 640,760
Refundable withholding tax 240,918 45,848
- -------------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 2,961,815 1,686,877
Artifacts Recovered, at cost 9,200,340 7,700,340
Deferred Income Tax Asset, net of valuation allowance of
$486,000 and $503,000, respectively -- --
Property and Equipment, net of accumulated depreciation
of $158,657 and $73,207, respectively 1,309,719 652,599
Other Assets 40,880 38,880
- -------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 13,512,754 $ 10,078,696
=======================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities $ 2,220,590 $ 2,483,200
Income taxes payable 859,850 143,960
Deferred revenue 416,667 14,943
- -------------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 3,497,107 2,642,103
- -------------------------------------------------------------------------------------------------------
Stockholders' Equity:
Common stock - $.0001 par value; authorized 30,000,000 shares,
issued and outstanding 16,187,128 shares 1,619 1,619
Additional paid-in capital 13,915,748 13,915,748
Accumulated deficit (3,901,720) (6,480,774)
- -------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY 10,015,647 7,436,593
- -------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 13,512,754 $ 10,078,696
=======================================================================================================
</TABLE>
See Notes to Financial Statements
4
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RMS TITANIC, INC.
STATEMENT OF INCOME
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
THREE-MONTH THREE-MONTH SIX-MONTH SIX-MONTH
PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
1998 1997 1998 1997
- -------------------------------------------------------------------------------------------------------------------------------
Revenue:
<S> <C> <C> <C> <C>
Exhibitions and related merchandise sales $ 1,073,511 $ 1,060,884 $ 3,170,530 $ 1,438,204
Licensing fees 3,365,650 5,308 3,481,591 5,308
Merchandise and other 157,511 15,638 429,531 43,992
Sale of coal 46,127 12,986 123,466 12,986
- -------------------------------------------------------------------------------------------------------------------------------
Total revenue 4,642,799 1,094,816 7,205,118 1,500,490
- -------------------------------------------------------------------------------------------------------------------------------
Expenses:
Cost of coal sold 8,853 1,304 11,483 1,304
General and administrative 477,384 313,605 864,779 659,521
Depreciation and amortization 55,225 2,030 85,450 4,222
Expedition costs attributable to licensing fees 1,845,000 - 1,845,000 -
Impairment loss on exhibitry equipment 150,000 - 150,000 -
- -------------------------------------------------------------------------------------------------------------------------------
Total expenses 2,536,462 316,939 2,956,712 665,047
- -------------------------------------------------------------------------------------------------------------------------------
Income before other income 2,106,337 777,877 4,248,406 835,443
Other income 5,000 37,600 5,000 37,600
- -------------------------------------------------------------------------------------------------------------------------------
Income from operations 2,111,337 815,477 4,253,406 873,043
Interest income 15,771 - 26,211 -
- -------------------------------------------------------------------------------------------------------------------------------
Income before provision for income taxes 2,127,108 815,477 4,279,617 873,043
Provision for income taxes 889,299 - 1,700,563 -
- -------------------------------------------------------------------------------------------------------------------------------
Net income $ 1,237,809 $ 815,477 $ 2,579,054 $ 873,043
================================================================================================================================
Basic income per common share $ 0.08 $ 0.05 $ 0.16 $ 0.05
================================================================================================================================
Weighted-average number of shares outstanding 16,187,128 16,179,519 16,187,128 16,178,324
================================================================================================================================
</TABLE>
See Notes to Financial Statements
5
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RMS TITANIC, INC.
STATEMENT OF CASH FLOWS
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
SIX-MONTH SIX-MONTH
PERIOD ENDED PERIOD ENDED
AUGUST 31, AUGUST 31,
1998 1997
- ----------------------------------------------------------------------------------------------------------
Cash flows from operating activities:
<S> <C> <C>
Net income $ 2,579,054 $ 873,043
- ----------------------------------------------------------------------------------------------------------
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 85,450 4,222
Impairment loss on exhibitry equipment 150,000 --
Other (76,500) --
Noncash exhibition revenue (333,333) --
Changes in operating assets and liabilities:
Increase in accounts receivable (316,459) (373,510)
(Increase) decrease in refundable withholding tax (195,070) 87,500
(Increase) decrease in other assets (2,000) 4,800
Decrease in accounts payable and accrued liabilities (262,610) (197,775)
Increase in income taxes payable 715,890 --
Decrease in deferred revenue (14,943) (301,668)
- ----------------------------------------------------------------------------------------------------------
TOTAL ADJUSTMENTS (249,575) (776,431)
- ----------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 2,329,479 96,612
- ----------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Artifact recovery costs (1,500,000) --
Purchases of property and equipment (66,070) (2,302)
- ----------------------------------------------------------------------------------------------------------
CASH USED IN INVESTING ACTIVITIES (1,566,070) (2,302)
- ----------------------------------------------------------------------------------------------------------
Cash flows used in financing activity - repayment of notes payable -- (64,430)
- ----------------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents 763,409 29,880
Cash and cash equivalents at beginning of period 1,000,269 105,854
- ----------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 1,763,678 $ 135,734
==========================================================================================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for income taxes $ 964,000 $ --
=========================================================================================================
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITY:
Noncash purchases of property and equipment $ 826,500 $ --
=========================================================================================================
</TABLE>
See Notes to Financial Statements
6
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RMS TITANIC, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
Note 1 - The accompanying financial statements contain all adjustments
necessary to present fairly the financial position of the
Company as of August 31, 1998 and its results of operations
and its cash flows for the three and six months ended August
31, 1998 and 1997. Results of operations for the three and six
month periods ended August 31, 1998 are not necessarily
indicative of the results that may be expected for the year
ending February 28, 1999.
Note 2 - In February 1997, Statement of Financial Accounting Standards
("SFAS") No. 128, Earnings per Share was issued. SFAS No.
128 requires dual presentation of basic earnings (loss) per
share ("EPS") and diluted EPS on the face of all statements
of earnings issued after December 15, 1997 for all entities
with complex capital structures. Basic EPS is computed as net
earnings divided by the weighted-average number of common
shares outstanding for the period. Diluted EPS reflects the
potential dilution that could occur from common shares
issuable through stock-based compensation including stock
options, restricted stock awards, warrants and other
convertible securities. The adoption of SFAS No. 128 had no
effect on the restatement of the net income per common share
for the three and six months ended August 31, 1997. Diluted
EPS is not presented for the three and six months ended
August 31, 1998 and 1997 since the dilutive effect of
potential common shares is not material.
Note 3 - In April 1996, the Company entered into an agreement with
CRE-CO Finanz GmbH, a German company, for an exhibition of
Titanic artifacts in Europe from May 8, 1997 to November 8,
1997. The agreement, as amended, extended the Exhibition
through September 30, 1998. Pursuant to the agreement, as
amended, the Company received two-thirds of the net profits,
after recoupment of certain project expenses through February
28, 1998 and $2.00 per visitor until May 1, 1998, as defined.
For the period subsequent from May 1, 1998, the Company
receives two-thirds of net profits, after recoupment of
certain project expenses, plus a percentage of merchandise
revenues as defined.
In December 1996, the Company entered into an agreement with
Florida International Museum, Inc. for an exhibition of
Titanic artifacts in St. Petersburg, Florida, from November
15, 1997 to May 15, 1998 and further extended the exhibition
to May 31, 1998. Pursuant to the
7
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RMS TITANIC, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
agreement, the Company received exhibition revenue from
attendance fees ranging from $0.34 to $3.10 per attendee,
based upon the total number of attendees during the exhibition
term, as defined. In addition, the Company received 10% of
gross revenue, as defined, from the sale of merchandise at the
exhibition.
In May 1997, the Company entered into an agreement with the
RMS Foundation, Inc. for the exhibition of artifacts,
expedition equipment, photographs and film footage from the
1996 Titanic expedition aboard the Queen Mary in Long Beach,
California (the "Queen Mary") from June 1, 1997 through
January 5, 1998 (the "Initial Term"). In January 1998, the
agreement was amended and the exhibition was extended through
February 5, 1998, was further extended through September 7,
1998, and has been extended on a month-to-month basis
thereafter (the "Extension Term"). Pursuant to the Queen Mary
exhibition agreement, the Company will receive, from the sale
up to 150,000 tickets, $2.00 per ticket during the Initial
Term and $2.50 per ticket during the Extension Term, and $3.00
per ticket from the sale of more than 150,000 tickets. In
addition, the Company will receive fifty (50%) percent of net
profits, as defined, from the sale of merchandise at the Queen
Mary exhibition, and fifty (50%) of any sponsorship revenues.
The Company has entered into an agreement with Resource Plus
and Event Management International ("EMI"), a division of the
World Trade Center Boston, for the presentation of more than
250 artifacts in Boston, Massachusetts from July 1, 1998
through on or about November 15, 1998. Pursuant to the
exhibition agreement, EMI is responsible for payment of all
costs and expenses related to the design, construction,
operation and marketing of the exhibition. Pursuant to the
exhibition agreement, the Company will receive two-thirds
(2/3) and EMI will receive one-third (1/3) of the net profits,
after recoupment of certain project expenses, as defined. The
agreement further provided that the ownership interest of
certain exhibitry and equipment aggregating $750,000 was
transferred to the Company as of August 31, 1998, in
satisfaction of the minimum exhibition fee due to the
Company.
8
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RMS TITANIC, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
Included in deferred revenue in the accompanying balance
sheet at August 31, 1998 is $416,667, which represents the
unearned portion of the minimum fees.
The Company has entered into an agreement with Titanic
Exhibition Japan Inc. ("TEJI") for the exhibition of
approximately 200 Titanic artifacts in six (6) venues in Japan
commencing on or about July 20, 1998 and ending on or about
July 1, 1999. Pursuant to the exhibition agreement, TEJI has
agreed to pay the conservator of the Company's artifacts
$321,000 for the conservation and restoration of artifacts to
be displayed in the exhibition. The exhibition agreement
further provides that TEJI will pay to the Company the greater
of $3.00 per attendee or 50% of the profits, as defined.
The Company entered into an agreement with IFREMER for the
charter of equipment and crews to conduct the Company's fifth
expedition to the Titanic wreck site in August 1998 (the
"Summer of 1998 Expedition"). Pursuant to the agreement, the
Company agreed to pay IFREMER the sum of $1,460,000 in
addition to a paid deposit of $200,000. Such sum included
$480,000 that was due and owing to IFREMER for the Company's
1996 expedition to the Titanic. The Company agreed to pay
$1,260,000 of such charter costs prior to the commencement
of the Summer of 1998 Expedition, with the $200,000 balance
to be paid upon the conclusion of the expedition. Pursuant
to the agreement between the Company and its audio-visual
licensee for the Summer of 1998 Expedition, the Company's
audio-visual licensee paid $1,180,000 of such charter costs
on behalf of the Company. In July 1998, the Company paid the
sum of $80,000 to IFREMER pursuant to the charter agreement.
The balance of $200,000 payable by the Company to IFREMER
under the charter agreement remains due and owing as of
August 31, 1998. All objects recovered during the Summer of
1998 Expedition are the subject of a lien granted to IFREMER
until the Company pays all sums due and owing to IFREMER for
the Summer of 1998 Expedition.
9
<PAGE> 10
RMS TITANIC, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
The Company and an unrelated television production company
entered into an agreement whereby the Company granted certain
rights to the production company for the production and
exploitation of audio and visual recordings with respect to
the Summer of 1998 Expedition (the "Productions"). In
consideration of the granting of such rights, the television
production company, among other things, agreed to pay the
cost for chartering equipment and crew necessary for the
Summer of 1998 Expedition, including, but not limited to,
$1,150,000 of the costs for chartering IFREMER's equipment
and crew and an aggregate of $2,195,000 of additional
equipment and crew from other unrelated third-parties, on
behalf of the Company. Of this $2,195,000, the Company has
charged to operations $1,845,000, representing costs
attributable to the licensing agreements. The Company has
retained the rights for commercial exploitation of recordings
made at the Titanic wreck site in a print format and
electronic media format, and certain royalty and other rights
with respect to the marketing and sale of home videos based
upon the Summer of 1998 Expedition as defined.
Note 4 - The Company is a named defendant in a lawsuit commenced in the
United States District Court for the Eastern District of
Virginia) on or about May 4, 1998 (Haver v. RMS Titanic, Inc.,
Civil Action No.: 2:98cv507). The plaintiff therein seeks a
declaratory judgment permitting him to participate in a
photographic expedition to the wreck of the Titanic known as
Operation Titanic. This action does not challenge the
Company's salvor-in-possession status. On or about May 4,
1998, the Company instituted a motion for a preliminary
injunction in the United States District Court for the Eastern
District of Virginia against Deep Ocean Expeditions, Mike
McDowell, Bakers World Travel, Quark Expedition, Ralph White,
Don Walsh, Alfred S. McLaren, WildWings, and Mr. Haver, all of
whom are involved in Operation Titanic, seeking an order
enjoining such parties from conducting their proposed
photographic expedition. (R.M.S. Titanic, Inc. v. The Wrecked
and Abandoned Vessel, etc. believed to be the RMS Titanic, in
rem, Civil Action No. -- --- 2:93cv902). The United States
District Court for the Eastern District of Virginia has
previously held, in August 1996, that RMS Titanic, Inc. had
the right to exclude others from taking photographs of the
wreck and to control entry in to the wreck site. The Court's
ruling to that effect also states that the Company has the
right to exclude others from the wreck site regardless of
whether the Company is at the wreck site while other groups
attempt to visit the site. Pursuant to stipulation, the action
commenced by Mr. Haver and the Company's motion for a
preliminary injunction have been consolidated. By Order dated
June 23, 1998, the Court granted the Company's motion for a
preliminary injunction enjoining
10
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RMS TITANIC, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
certain parties from visiting the wreck site to view and
photograph the wreck. Certain of the enjoined parties have
appealed the Order to the U.S. Court of Appeals for the Fourth
Circuit. By order entered on July 17, 1998, a motion to stay
the Order pending determination of the appeal was denied by
the U.S. Court of Appeals.
The Company is a named defendant in a lawsuit commenced in the
United States District Court for the Southern District of New
York on or about December 16, 1997 (Lindsay v. The Wrecked and
Abandoned Vessel RMS Titanic, et al., in rem, and RMS Titanic,
Inc. et al., No. 97Civ9248), as disclosed in the Company's
report on Form 8-K dated June 15, 1998. The plaintiff alleges
therein, inter alia, that he rendered certain services to the
Company in connection with its 1996 expedition to the Titanic
wreck site and in particular connection with the alleged
production film, video and still images of the Titanic
illuminated by certain light towers. The relief sought
includes an accounting and a judgment declaring the plaintiff
a co-salvor of the 1996 expedition and awarding him, in
specie, the underwater, film, video and still photographs
allegedly obtained by plaintiff from the use of the light
towers. The plaintiff also seeks an award of compensatory
damages of up to approximately $500,000 and punitive damages
in excess of $2,000,000 based upon claims of breach of
contract, fraudulent misrepresentation, money lent, quantum
meruit and conversion. Management of the Company has filed an
answer denying the essential allegations of the complaint,
intends to defend itself vigorously, and to assert
counterclaims seeking compensatory and punitive damages
against the plaintiff based upon, among other things, claims
that the plaintiff has wrongfully removed and retained
property owned by the Company, has wrongfully interfered with
contractual relations with third parties, and has violated the
Company's copyright to the images obtained with the light
towers. In connection with this action, the parties agreed,
without further order of the court, coins and currency
recovered from the Titanic located within the Southern
District of New York (the "District") as of December 18, 1997
would not be removed from the District, and would not be sold,
liened or otherwise encumbered. The Company filed a motion to
dismiss the complaint and/or transfer it to the Eastern
District of Virginia. By order dated September 1, 1998, the
Court granted the Company's motion to dismiss the plaintiff's
claim for an accounting, vacated the above agreement between
the parties with respect to disposition of the coins and
currency without order of the court, and otherwise denied the
Company's motion to dismiss. This action is now in the stage
of
11
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RMS TITANIC, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
discovery proceedings.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion provides information to assist in the
understanding of the Company's financial condition and results of operations,
and should be read in conjunction with the financial statements and related
notes appearing elsewhere herein.
RESULTS OF OPERATIONS
FOR THE QUARTER ENDED AUGUST 31, 1998 VERSUS
THE QUARTER ENDED AUGUST 31, 1997
FOR THE SIX MONTHS ENDED AUGUST 31, 1998 VERSUS
THE SIX MONTHS ENDED AUGUST 31, 1997
During the second quarter and the first six months of its 1999 fiscal
year (the "1999 fiscal year"), the Company's revenues increased approximately
324% and 380%, respectively, as compared to the second quarter and the first
six months of its 1998 fiscal year (the "1998 fiscal year"). This change was
principally attributable to increases in licensing fees of 63,307% and 65,491%
during the second quarter and first six months of the 1999 fiscal year,
respectively, as compared to the corresponding periods of the 1998 fiscal year.
These changes were principally attributable to the Company having earned
licensing fees of approximately $3,345,000 during the second quarter of the
1999 fiscal year related to the production and exploitation of audio and visual
recordings with respect to the Company's expedition to the Titanic wreck site
during the summer of 1998 (the "Summer of 1998 Expedition"). The Company's
revenue from exhibitions increased approximately 1% during the second quarter
of the 1999 fiscal year as compared to the second quarter of the 1998 fiscal
year, and increased approximately 120% during the first six months of the 1999
fiscal year as compared to the first six months of the 1998 fiscal year. This
change during the respective six month periods was primarily attributable to
the extent of the Company's exhibition activities during the first quarter of
the 1999 fiscal year as compared to the first quarter of the 1998 fiscal year.
Revenue from merchandise, book and other activities increased approximately
907% and approximately 876% during the second quarter and first six months of
the 1999 fiscal year, respectively, as compared with the corresponding periods
of the 1998 fiscal year. These changes resulted primarily from the recognition
of revenues during the 1999 fiscal year from a book published in conjunction
with unrelated third parties and revenue derived from the sale of merchandise
through the Company's web site (http://www.titanic-online.com). The Company's
revenue from the sale of coal increased 255% and 851% during the second quarter
and first six months of the 1999 fiscal year, respectively, as compared to the
corresponding periods of the 1998 fiscal year. These changes derived primarily
from increases in the amount of coal sold through the Company's web site and in
the merchandise shops of the Company's United States exhibitions.
12
<PAGE> 13
The Company's cost of coal sold increased approximately 579% during the
second quarter of the 1999 fiscal year as compared to the second quarter of the
1998 fiscal year, and approximately 781% during the first six months of the
1999 fiscal year as compared to the first six months of the 1998 fiscal year,
with such cost relating to the volume of sales in the respective periods. The
Company's general and administrative expenses increased approximately 52%
during the second quarter of the 1999 fiscal year as compared to the second
quarter of the 1998 fiscal year, and increased approximately 31% during the
first six months of the 1999 fiscal year as compared to the first six months of
the 1998 fiscal year. These changes were primarily the result of an increase in
professional fees. The Company's depreciation and amortization expenses
increased approximately 2,620% and 1,924% during the second quarter and first
six months of the 1999 fiscal year, respectively, as compared to the
corresponding periods of the 1998 fiscal year. During the second quarter of the
1999 fiscal year, the Company incurred $1,845,000 of costs related to vessel
and equipment chartering related to the Company's audio-visual licensee's
requirements for the Summer of 1998 Expedition. During the second quarter of
its 1999 fiscal year, the Company recorded an impairment loss of $150,000
attributable to exhibitry equipment related to the Company's exhibition of
Titanic artifacts in Hamburg, Germany based upon the determination that certain
items of exhibitry would not be utilized in the planned re-location and
presentation of the Hamburg exhibition in Zurich, Switzerland commencing in the
middle of November 1998.
The Company's income before provision for income taxes increased
approximately 161% during the second quarter of the 1999 fiscal year as compared
to the second quarter of the 1998 fiscal year, and increased approximately 390%
during the first six months of the 1999 fiscal year as compared to the first six
months of the 1998 fiscal year. The Company's net income increased approximately
52% during the second quarter of the 1999 fiscal year as compared to the first
quarter of the 1998 fiscal year, and increased approximately 195% during the
first six months of the 1999 fiscal year as compared to the first six months of
the 1998 fiscal year.
LIQUIDITY AND CAPITAL RESOURCES
In connection with its 1994 expedition to the wreck site of the
Titanic, the Company entered into an agreement with IFREMER to charter equipment
and crew necessary to conduct research and recovery efforts. Pursuant to the
terms of such charter agreement, the Company has paid IFREMER the sum of
$300,000 and was obligated to pay an additional $700,000 in two installments of
$350,000 each payable on September 30 and December 1, 1994. The installment due
to IFREMER on September 30, 1994 was paid during the first quarter of the
Company's 1996 fiscal year, payment of the final $350,000 installment was
extended to October 1, 1995. During the 1996 fiscal year, the Company paid
$70,000 on account of such obligation, with the $280,000 balance thereof having
been paid subsequent to February 29, 1996. The source of such $280,000 payment
was from an unaffiliated entity with which the Company entered into an agreement
for the marketing of coal and the sale of cabins of cruise ships which
accompanied the Company on its 1996 research and recovery expedition,
13
<PAGE> 14
and this payment was made as an advance against the Company's share of profits
from Titanic coal sales and sales of such cruise ship cabins. The $280,000
advance was reduced by approximately $127,000 from the sale of coal during the
1998, 1997 and 1996 fiscal years, resulting in an unpaid balance of $153,168 as
of February 28, 1998. Such unpaid balance, which was not further reduced during
the second quarter of the 1999 fiscal year, does not bear interest. There were
no profits from sale of cruise ship cabins for the 1996 expedition.
The Company entered into an agreement with IFREMER to charter equipment
and crew necessary to conduct a research and recovery expedition to the wreck
site of the Titanic in the Summer, 1996. Pursuant to the terms of such charter
agreement, the Company agreed to pay IFREMER 2,000,000 French francs
(approximately $400,000 U.S. Dollars) on or before June 20, 1996; 2,100,000
French francs (approximately $420,000 U.S. Dollars) on or before July 15, 1996;
and the sum of $980,000, payable as follows: (a) remittance of fifty (50%) of
the wholesale price of any products sold by the Company involving the 1996
expedition, up to a maximum of $480,000; and (b) up to a maximum of $500,000
payable from the following sources: (i) $.50 per visitor to any exhibition
organized by the Company; (ii) a lump sum of $250,000 for the Memphis
exhibition, payable prior to March 1, 1997; and (iii) one-third of the Company's
revenues received from any exhibition of artifacts organized by a third party,
as described. The agreement further provides that in the event the payments from
these sources do not amount to $980,000 within three (3) years after September
1, 1996, any remaining balance shall be paid from the Company's exhibition
revenues, as defined above. The Company has satisfied its obligations to pay
$500,000 of its exhibition revenue to IFREMER, as described above, and has not
received any income from the sale of products involving the 1996 expedition.
Accordingly, as of June 1, 1998, the unpaid balance owed to IFREMER under the
1996 charter agreement is $480,000, with the sum of $200,000 paid to IFREMER
during the first quarter of the 1999 fiscal year having been applied as a
deposit for the chartering of IFREMER's vessel and crews for the Summer of
1998 Expedition.
In connection with the Summer of 1998 Expedition, the Company entered
into an agreement with IFREMER to charter equipment and crew necessary for this
expedition, which commenced on August 3, 1998 and concluded on August 31, 1998.
Pursuant to the terms of such charter agreement, the Company agreed to pay
IFREMER, in addition to the deposit of $200,000, the sum of $1,460,000 for this
expedition, inclusive of all amounts that were due and owing to IFREMER for the
Summer of 1996 Expedition ($480,000). The Company agreed to pay $1,260,000 of
such charter costs prior to the commencement of the Summer of 1998 Expedition,
with the $200,000 balance to be paid upon the conclusion of the expedition.
Pursuant to the agreement between the Company and its audio-visual licensee for
the Summer of 1998 Expedition, the Company's audio-visual licensee paid
$1,150,000 of such charter costs on the Company's behalf. In July 1998, the
Company paid the sum of $80,000 to IFREMER pursuant to the charter agreement.
The balance of $200,000 payable by the Company to IFREMER under the charter
agreement remains due and owing as of the date of this report. All objects
recovered during the Summer of 1998 Expedition are the subject of a lien
granted to IFREMER until the Company pays all sums due and owing to IFREMER for
such expedition.
14
<PAGE> 15
In addition to the charter agreement with IFREMER, the Company also
entered into agreements with unrelated third parties for the chartering of
equipment and crews in connection with the Summer of 1998 Expedition in an
aggregate amount of $2,195,000. The Company's audio-visual licensee for the
Summer of 1998 Expedition, in addition to the $1,150,000 payment to IFREMER
discussed above, also agreed to pay all of such other charter costs on the
Company's behalf.
The Company's capital commitments during its 1999 fiscal year includes
compensation to the Company's principal executive officer and lease payments for
its principal offices, with respect to which the Company is presently
negotiating an extension of its lease for the period commencing October 1, 1998.
The Company's near term operating needs will be financed principally
from the distribution of revenues to the Company under its agreements for
exhibitions in Hamburg, Germany; Boston, Massachusetts; its touring exhibition
in Japan; and at the Queen Mary in Long Beach, California. The Company has
entered into an agreement to move its exhibition currently presented in Boston,
Massachusetts, which is presently scheduled to end on November 15, 1998, to St.
Paul, Minnesota for a four (4) month period commencing January 1, 1998 (the "St.
Paul Exhibition"). Pursuant to its agreement for the St. Paul Exhibition, the
Company will be paid a minimum of $1,000,000 no later than February 28, 1999
(subject to withholding for a maximum period of one month an amount of up to
approximately $200,000 for agreed upon operating expenses for the month of
March 1999 in the event that cash flow needs so require). The Company will
receive two-thirds of the net profits, as defined (the "Net Profits"), derived
from ticket, merchandise and sponsorship revenues in excess of a maximum budget
of $2,000,000 (the "Budget"). The Budget includes a $300,000 payment to be made
to the Company for the lease of its exhibitry for the St. Paul Exhibition. The
$1,000,000 minimum to be paid to the Company will be credited against its share
of the Net Profits.
The Company has also preliminarily agreed, subject to the execution of
a definitive agreement, for the re-location of its exhibition from Hamburg,
Germany, which closed on September 30, 1998, to Zurich, Switzerland for a
six-month presentation commencing on or about November 9, 1998 (the "Zurich
Exhibition"). Pursuant to the terms of the preliminary agreement, the Company
will be paid a minimum of $100,000 per month, commencing November 30, 1998,
during the term of the Zurich Exhibition. After the total of net ticket and
sponsorship revenue combined with 20% of gross merchandise sales (less sales
tax) exceed 4,600,000 Swiss Francs (the "Threshold"), the Company will receive
two-thirds of the net profits, as defined, derived from ticket and sponsorship
revenues in excess of the Threshold and 20% of all merchandise revenues from
inception of the Zurich Exhibition. The $100,000 per month payments to the
Company will be credited against its share of the net profits from the Zurich
Exhibition after the Threshold has been attained. The Company is also actively
negotiating for the presentation of an exhibition of its Titanic artifacts in
venues after its present and planned exhibitions are completed. In the event
that cash flows are not adequate to satisfy the Company's future operating
needs (inclusive of payment of outstanding liabilities), no assurances of which
can be given, additional debt and/or equity financing may be required.
15
<PAGE> 16
In view of the Company's recent purchase of new computers and the
limited impact that Year 2000 issues has upon the Company's business activities
or competitive conditions, management of the Company does not believe that Year
2000 issues will have a material adverse affect upon the Company.
Substantially all of the Company's cash flow derives from the
Company's operating activities. None of the Company's cash flow during the
first quarter of the 1999 fiscal year derived from financing activities with
approximately $1,566,000 used in investing activities.
Except for historical information contained herein, this Quarterly
Report on Form 10-Q contains forward-looking statements within the meaning of
the Private Securities Reform Act of 1995 which involve certain risks and
uncertainties including, without limitation, the Company's needs, as discussed
above, to obtain additional financing in order to achieve its objectives and
plans. The Company's actual results or outcomes may differ materially from those
anticipated. Important facts that the Company believes might cause such
differences are discussed in the cautionary statements accompanying the
forward-looking statements as well as in the risk factors discussed below.
Although the Company believes that the assumptions underlying the
forward-looking statements contained herein are reasonable, any of the
assumptions could be inaccurate, and therefore, there can be no assurance that
the forward-looking statements contained in this Report will prove to be
accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation of the Company or any other such
person that the objectives and plans of the Company will be achieved. In
addition to uncertainties of ordinary business operations and the factors
discussed in the Company's Form 8-K dated June 15, 1998, the forward-looking
statements of the Company contained in this report are also subject to the
following risks and uncertainties:
In order for the Company to design, construct and embark on the
Waterborne Exhibition, additional debt and/or equity financing will be required.
While management believes that such financing will be available, no assurances
can be given that the Company will be successful in its efforts to obtain
additional financing, or that such financing will be available on a satisfactory
timetable. If the Company is unable to arrange income producing exhibitions
similar to its land-based exhibitions in Memphis, St. Petersburg, Boston, and
Hamburg, or funding for the planned worldwide touring exhibition is not
obtained, there could be a curtailment of the Company's long-term business
activities and material delays in the implementation of its business plans.
Until such time as the Company, if ever, presents the exhibition of its
artifacts on the Waterborne Exhibition, the Company could experience
difficulties or delays in making arrangements with third parties for the
presentation of exhibitions at land-based venues on terms that are acceptable
and satisfactory to the Company. The Company's ability to present such
exhibitions in association with third parties will be dependent upon the
agreement of such third parties to construct, market and operate the
exhibitions, or the Company having adequate financial resources to construct
and/or operate the exhibitions. Delays or difficulties in making arrangements
for the presentation of exhibitions at land-based venues could have a materially
adverse affect upon the Company's operations.
The Company could experience difficulties or delays in obtaining
financing for the Waterborne Exhibition, and if financing is obtained on terms
acceptable to the Company, could also experience difficulties or delays in the
construction of the Waterborne Exhibition. The Waterborne Exhibition is
16
<PAGE> 17
subject to all the delays and uncertainties associated with construction
projects generally. Additionally, the Company has not made arrangements for the
presentation of the Waterborne Exhibition in specific ports and will need to
obtain permits and approvals from local governmental authorities. While
management of the Company believes that such arrangements will be available on
terms and conditions acceptable to the Company, and that the Company will
satisfy requirements for such permits and approvals, difficulties and delays
could be encountered in securing prospective sites and/or the requisite permits
and approvals, which, in turn, could delay or otherwise adversely impact the
Company's revenue producing activities.
The Company has been seeking and intends to continue to seek debt
financing to fund as much of the Waterborne Exhibition as may be available on
terms satisfactory to the Company. In connection with any such debt financing
that may be obtained, no assurances of which can be given, the Company expects,
among other things, to be required to pledge its assets to a lender, to be
restricted in its ability to incur additional obligations, and/or to abide by
certain financial covenants.
The Company's strategy for presenting exhibitions of Titanic artifacts
is dependent upon making acceptable arrangements with third parties or hiring
personnel who are experienced and possess expertise in operation and marketing
exhibitions. Management of the Company believes that acceptable arrangements
with such personnel or third-parties can be made within time frames required to
implement the Company's exhibition strategies. However, no assurance can be made
that such personnel or third-parties will be available on satisfactory terms or
when needed by the Company. Delays or difficulties in engaging personnel or
third parties for the operations and marketing of exhibitions, including without
limitation the Waterborne Exhibition, could have a materially adverse affect
upon the Company's operations.
The Company's future business and operating results depend in
significant part upon the continued contributions of George Tulloch, the
Company's President. The Company does not maintain a key person life insurance
policy on Mr. Tulloch. The Company's future business and operating results also
depends in significant part upon its ability to attract and retain qualified
additional management, marketing and support personnel for its operations.
In order to protect its salvor-in-possession status and to prevent
third-parties from salvaging the Titanic wreck and wreck site, or interfering
with the Company's rights and ability to salvage the wreck and wreck site, the
Company may have to commence judicial proceedings against third-parties. Such
proceedings could be expensive and time-consuming. Additionally, the Company, in
order to maintain its salvor-in-possession status, needs to, among other things,
maintain a reasonable presence at the wreck through periodic expeditions. In
addition to the payment of the balance due to IFREMER for the Summer of 1998
Expedition, the Company will be required to incur the costs for future
expeditions so as to maintain its salvor-in-possession status. The Company's
ability to undertake future expeditions may be dependent upon the availability
of financing from the grant of licenses to produce television programming and/or
the grant of expedition sponsorship rights. No assurances can be given that such
financing will be available on satisfactory terms.
17
<PAGE> 18
The amount spent by consumers on discretionary items, such as
entertainment activities and the purchase of merchandise, is dependent upon
consumers' levels of discretionary income, which may be adversely affected by
general or local economic conditions. A decrease in consumer spending on such
activities could have a material adverse effect on the Company's revenues from
exhibition activities and merchandising efforts.
The Company's sales of coal recovered from the Titanic wreck site and
other merchandise through its web site increased significantly during the period
of the initial theatre release of the motion picture "Titanic" in December 1997
without the Company incurring any significant marketing expenses. This coal is
the only object recovered from the Titanic that the Company is offering or will
offer for sale to the general public. Through the date of this report,
approximately 100,000 units of the Company's Titanic coal have been sold since
the commencement of such sales in the fall 1996, which represents approximately
one-half of the total units of coal available for sale. A substantial portion of
the remaining Titanic coal supply is different in size than that which the
Company has marketed to date, and the Company's pricing and commercial
presentation of the coal is likely to change. No assurances can be given that
different price points or different presentations of the coal will be attractive
to consumers. Additionally, in the event that the Company does not recover any
additional Titanic coal, and the existing supply of coal is exhausted in the
future, the volume of the Company's merchandise sales may be materially
adversely affected in the absence of the introduction and marketing of
additional products, such as replicas of artifacts.
To the extent that the Company has transactions outside of the United
States, the Company could be affected by nationalizations or unstable
governments or legal systems or intergovernmental disputes. These economic and
political uncertainties may affect the Company's results of operations,
especially to the extent that these matters affect the Company's exhibition
plans in Europe and Japan.
In connection with its activities outside of the United States, the
Company is exposed to the risk of currency fluctuations between the United
States dollar and certain foreign currency. If the value of the United States
dollar increases in relation to the foreign currency, the Company's potential
revenues from exhibition and merchandising activities outside of the United
States will be adversely affected. During the second quarter of the 1999 fiscal
year, there were no significant fluctuations in the exchange rates with respect
to foreign currencies in which the Company transacts business. Although the
Company's financial arrangements with IFREMER and its exhibition organizer in
Germany and Japan and other entities have been based in whole or in part upon
foreign currencies, the Company has sought and will continue to seek to base its
financial commitments and understandings upon the United States dollar in its
material business transactions so as to minimize the adverse potential effect of
currency fluctuations.
18
<PAGE> 19
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company is a named defendant in a lawsuit commenced in the United
States District Court for the Eastern District of Virginia) on or about May 4,
1998 (Haver v. RMS Titanic, Inc., Civil Action No.: 2:98cv507). The plaintiff
therein seeks a declaratory judgment permitting him to participate in a
photographic expedition to the wreck of the Titanic known as Operation Titanic.
This action does not challenge the Company's salvor-in-possession status. On or
about May 4, 1998, the Company instituted a motion for a preliminary injunction
in the United States District Court for the Eastern District of Virginia against
Deep Ocean Expeditions, Mike McDowell, Bakers World Travel, Quark Expedition,
Ralph White, Don Walsh, Alfred S. McLaren, WildWings, and Mr. Haver, all of whom
are involved in Operation Titanic, seeking an order enjoining such parties from
conducting their proposed photographic expedition. (R.M.S. Titanic, Inc. v. The
Wrecked and Abandoned Vessel, etc. believed to be the RMS Titanic, in rem, Civil
Action No. 2:93cv902). The United States District Court for the Eastern District
of Virginia has previously held, in August 1996, that RMS Titanic, Inc. had the
right to exclude others from taking photographs of the wreck and to control
entry in to the wreck site. The Court's ruling to that effect also states that
the Company has the right to exclude others from the wreck site regardless of
whether the Company is at the wreck site while other groups attempt to visit the
site. Pursuant to stipulation, the action commenced by Mr. Haver and the
Company's motion for a preliminary injunction have been consolidated. By Order
dated June 23, 1998, the Court granted the Company's motion for a preliminary
injunction enjoining certain parties from visiting the wreck site to view and
photograph the wreck. Certain of the enjoined parties have appealed the Order to
the U.S. Court of Appeals for the Fourth Circuit. By order entered on July 17,
1998, a motion to stay the Order pending determination of the appeal was denied
by the U.S. Court of Appeals.
The Company is a named defendant in a lawsuit commenced in the
United States District Court for the Southern District of New York on or about
December 16, 1997 (Lindsay v. The Wrecked and Abandoned Vessel RMS Titanic, et
al., in rem, and RMS Titanic, Inc. et al., No. 97Civ9248), as disclosed in the
Company's report on Form 8-K dated June 15, 1998. The plaintiff alleges therein,
inter alia, that he rendered certain services to the Company in connection with
its 1996 expedition to the Titanic wreck site and in particular connection with
the alleged production film, video and still images of the Titanic illuminated
by certain light towers. The relief sought includes an accounting and a judgment
declaring the plaintiff a co-salvor of the 1996 expedition and awarding him, in
specie, the underwater, film, video and still photographs allegedly obtained by
plaintiff from the use of the light towers. The plaintiff also seeks an award of
compensatory damages of up to approximately $500,000 and punitive damages in
excess of $2,000,000 based upon claims of breach of contract, fraudulent
misrepresentation, money lent, quantum meruit and conversion. Management of the
19
<PAGE> 20
Company has filed an answer denying the essential allegations of the complaint,
intends to defend itself vigorously, and to assert counterclaims seeking
compensatory and punitive damages against the plaintiff based upon, among other
things, claims that the plaintiff has wrongfully removed and retained property
owned by the Company, has wrongfully interfered with contractual relations with
third parties, and has violated the Company's copyright to the images obtained
with the light towers. In connection with this action, the parties agreed,
without further order of the court, coins and currency recovered from the
Titanic located within the Southern District of New York (the "District") as of
December 18, 1997 would not be removed from the District, and would not be sold,
liened or otherwise encumbered. The Company filed a motion to dismiss the
complaint and/or transfer it to the Eastern District of Virginia. By order dated
September 1, 1998, the Court granted the Company's motion to dismiss the
plaintiff's claim for an accounting, vacated the above agreement between the
parties with respect to disposition of the coins and currency without order of
the court, and otherwise denied the Company's motion to dismiss. This action is
now in the stage of discovery proceedings.
ITEM 2. CHANGES IN SECURITIES.
None.
ITEM 3. DEFAULT UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
10.1 1998 Charter Agreement with IFREMER.
10.2 1998 Charter Agreement with Oceaneering International,
Inc.
10.3 Agreement dated July 15, 1998 between Discovery
Communications and the Company.
10.4 1998 Charter Agreement with Aqua Plus.
10.5 1998 Charter Agreement with Les Abeilles International,
Travocean and the Company.
10.6 Amendment to Agreement dated August 4, 1998 between the
Company and CRE-CO Finanz GmbH.
20
<PAGE> 21
(b) REPORTS ON FORM 8-K
On June 15, 1998, the Company filed a report on Form 8-K reporting on
Items 5 and 7.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
RMS TITANIC, INC.
(Registrant)
Dated: October 20, 1998 By: /s/ George Tulloch
---------------------------------------
George Tulloch, Principal Executive Officer
and Principal Accounting Officer
21
<PAGE> 22
EXHIBIT INDEX
-------------
Exhibit
Index
10.1 1998 Charter Agreement with IFREMER.
10.2 1998 Charter Agreement with Oceaneering International,
Inc.
10.3 Agreement dated July 15, 1998 between Discovery
Communications and the Company.
10.4 1998 Charter Agreement with Aqua Plus.
10.5 1998 Charter Agreement with Les Abeilles International,
Travocean and the Company.
10.6 Amendment to Agreement dated August 4, 1998 between the
Company and CRE-CO Finanz GmbH.
27 Financial Data Schedule.
<PAGE> 1
Adopted by the Documentary Committee of the General Council of British
Shipping, London
THE BALTIC AND INTERNATIONAL MARITIME CONFERENCE UNIFORM TIME CHARTER PARTY FOR
OFFSHORE SERVICE VESSELS CODE NAME: "SUPPLYTIME"
PART I
- --------------------------------------------------------------------------------
1. Paris, 20th July 1998
- --------------------------------------------------------------------------------
2. Owners/Disponent Owners/Place of Business
IFREMER, hereafter called the OWNERS or
IFREMER
155, rue Jean-Jacques Rousseau
92138 ISSY-LES-MOULINEAUX CEDEX
FRANCE
- --------------------------------------------------------------------------------
3. Charteres/Place of business
RMS TITANIC, INC.
17, Battery Place
Suite 203
NEW-YORK 10004
UNITED STATES OF AMERICA
- --------------------------------------------------------------------------------
4. Vessel's name
NADIR SURFACE VESSEL together with :
- NAUTILE SUBMERSIBLE (- 6000 m)
- ROBIN (ROV) - OCEANO (Positioning System)
- --------------------------------------------------------------------------------
5. Date of delivery (Cl. 2(A))
July 29, 1998
- --------------------------------------------------------------------------------
6. Cancelling date (Cl. 2(A))
NOT APPLICABLE
- --------------------------------------------------------------------------------
7. Port or place of delivery (Cl. 2(A))
PUNTA DELGADA
- --------------------------------------------------------------------------------
8. Port or place of re-delivery (Cl. 8(A))
St JOHN'S NEWFOUNDLAND (CANADA)
- --------------------------------------------------------------------------------
9. Period of hire (Cl. 1(A))
38 days
- --------------------------------------------------------------------------------
10. Extension of period of hire (optional) (Cl. 1(B))
NOT APPLICABLE
- --------------------------------------------------------------------------------
11. Trading limits (Cl. 3(A))
NORTH ATLANTIC OCEAN
- --------------------------------------------------------------------------------
12. Employment of vessel restricted to (state nature of service(s)) (Cl.
3(A))
DIVING ON RMS TITANIC TO PROMOTE THE SURVEY OF THE WRECK AND TO RECOVER
OBJECTS OF THE TITANIC.
- --------------------------------------------------------------------------------
13. Charter hire (Cl. 7(A))
SEE ARTICLE 25
- --------------------------------------------------------------------------------
14. Hire payment (state currency, mode and place of payment: also beneficiary
and bank account) (Cl. 7(A))
US DOLLARS
Payments in favour of IFREMER by
transfer to account no. 307 T opened
with CREDIT LYONNAIS, 11, rue d'Argenson
75008 PARIS - FRANCE
- --------------------------------------------------------------------------------
15. Mobilisation charge (lump sum) (Cl. 2(B))
INCLUDED
- --------------------------------------------------------------------------------
16. Port or place of delivery (Mobilisation) (Cl. 2(B))
PUNTA DELGADA
- --------------------------------------------------------------------------------
17. Demobilisation charge (lump sum) (Cl. 8(B))
INCLUDED
- --------------------------------------------------------------------------------
18. Number of days' notice of re-delivery (Cl. 8(C))
NOT APPLICABLE
SEE BOX 10
- --------------------------------------------------------------------------------
19. Early termination of charter (state number of months' hire payable) (Cl.
8(D))
NOT APPLICABLE
- --------------------------------------------------------------------------------
20. Number of months' notice of early termination (Cl. 8(D))
NOT APPLICABLE
- --------------------------------------------------------------------------------
21. Meals (state rate agreed) (Cl. 9(I))
FREE OF CHARGE
- --------------------------------------------------------------------------------
22. Passenger accommodation (state rate agreed) (Cl. 9(I))
FREE OF CHARGE
- --------------------------------------------------------------------------------
23. Port or place of drydocking (Cl. 11(C))
IRRELEVANT
- --------------------------------------------------------------------------------
24. War (only to be filled in if Sub-Clause (C) agreed) (Cl. 22)
SEE ARTICLE 13
- --------------------------------------------------------------------------------
25. Sub-let (state amount of daily increment to charter hire) (Cl. 20(B))
SEE ARTICLE 12
- --------------------------------------------------------------------------------
26. Place of arbitration (only to be filled in if place other than London
agreed) (Cl. 27)
LONDON
- --------------------------------------------------------------------------------
27. Number of additional clauses covering special provisions, if agreed
1 TO 28
- --------------------------------------------------------------------------------
It is mutually agreed that this Contract shall be performed subject to the
conditions contained in the Charter consisting of Part I, including additional
clauses, if any agreed and stated in Box 27, and Part II as well as Appendix A
and Appendix B as annexed to this Charter. In the event of a conflict of
conditions, the provisions of Part I shall prevail over those of Part II and
Appendix A and Appendix B.
- --------------------------------------------------------------------------------
Signature (Owners) Signature (Charterers)
Pierre DAVID,
President Directeur General
/s/ Pierre David /s/ G. H. Tulloch
- --------------------------------------------------------------------------------
Copyright, published by The Baltic and International Maritime Conference
(BIMCO). Copenhagen. Issued December 1975
<PAGE> 2
REF. IFREMER : No. 98/1213037/F F6/AS
PART II
AMENDED "SUPPLY TIME" FORM PART II
ARTICLE 1 - PERIOD OF CHARTER :
1.1 The OWNERS let and the CHARTERERS hire the Vessel and the underwater
vehicles described in Appendix "A" ((B)) and "C" for the period as indicated in
Box 9 from the time the vessel is delivered to the CHARTERERS subject to
subclause 1.2. hereunder.
1.2. The basic period of the charter shall be 38 days, including one day middle
port call due to range of the Vessel, made up in the manner, and subject to the
provisos, set out below :
ARTICLE 2 - DELIVERY
The Vessel shall be delivered by the OWNERS and accepted by the CHARTERERS
on the date indicated in Box 5.
ARTICLE 3 - EMPLOYMENT
(A) The Vessel shall be employed in activities restricted to the
service(s) stated in Box 12 within the trading limits indicated in Box 11 which
shall, in no circumstances, be exceeded without prior agreement and adjustment
of the Charter hire and such other terms as appropriate to be agreed.
(B) The OWNERS hereby confirm that they are authorized to enter into and
perform this Charter under French Law. Permission from any other responsible
Authorities for Vessel and its Crew to work in the area defined in Article 19
and Box 11, if required, shall be the responsibility of CHARTERERS and OWNERS
shall assist, if necessary, in every way possible to secure such permission. If
any other country than France prevents the performance of the TITANIC
expedition, the total Charter hire defined in Box 13 shall be paid to the
OWNERS.
<PAGE> 3
ARTICLE 4 - OWNERS TO PROVIDE
(A) The OWNERS shall provide and pay for all provisions and wages, for
third party insurance of the Vessel, for all deck and engineroom stores (except
those which by the terms of this Charter agreement are expressly payable by the
CHARTERERS) and the expense of maintaining the hull and machinery of the Vessel
during her employment.
Maintenance of Vessel
(B) The OWNERS undertake that throughout the period under this Charter
they will take all reasonable steps to maintain the Vessel in efficient state in
hull and machinery or to restore the Vessel to such state.
(C) The OWNERS shall further provide and pay for all fuel and lubricants
and transport thereof (including auxiliary machinery and galley fuel), water,
port charges, pilotage and boatmen (whether compulsory or not) canal steersmen,
light dues, solid ballast, tug assistance, consular charges, canal, dock and
other dues and charges, dock, harbour and tonnages dues at the ports of delivery
and re-delivery, agencies and commissions costs for security or other watchmen,
expenses of fumigation (including deratisation and extermination of vermin) and
of quarantine (if occasioned by the nature of the cargo carried or the port
visited whilst employed under this Charter).
The OWNERS shall also provide and pay for the loading and unloading of
cargoes except the objects covered by Article 21 and for all necessary dunnage,
uprights and shoring equipment for securing deck cargo, all cordage (excluding
such as is required for ordinary ship's purposes, mooring alongside in harbour
but including such as is required for securing to the offshore units or
necessitated by any special requirements of the harbour authorities), and all
ropes, slings and special runners (including bulk cargo discharge hoses)
actually used for loading and discharging.
OWNERS shall further provide and pay for custom duties, permits, import
duties, including costs involved in establishing temporary or permanent
importation bond(s), clearance expenses both for the Vessel and/or equipment
except in respect of the objects covered by Article 21, also special mooring
lines to offshore platforms, wires, nylons, spring lines, slings etc. used for
offshore works with hose connections and adaptors, refill oxygen/acetylene
bottles and supply electrodes for offshore works.
ARTICLE 5 - BUNKERS AND LUBRICANTS
The OWNERS shall be responsible for providing and paying for all bunkers
and lubricants.
ARTICLE 6 - RE-DELIVERY
The Vessel shall be re-delivered on the expiration of this Charter
agreement.
<PAGE> 4
ARTICLE 7 - THE VESSEL'S SPACE
The whole reach and burden and decks of the Vessel shall be at the
CHARTERER'S disposal reserving proper and sufficient space for the Vessel's
tackle, apparel, furniture, provisions and stores. The CHARTERERS shall be
entitled to carry, so far as space is available and for their purpose in
connection with their operations :
(i) Passengers including T.V. and filming crews, and for such purposes
to make use of the Vessel's available accommodation not being used
on the voyage by the Vessel's Master, Officers and Crew. The
OWNERS shall provide suitable provisions and requisites for such
passengers.
(ii) Lawful cargo whether carried on or under deck.
(iii) Explosives and dangerous cargo provided such are packed and stowed
in accordance with ship's national regulations and/or IMCO
Dangerous Goods Code and/or other pertinent regulations. The
CHARTERERS accept responsibility for any additional expenses
(including restoration expenses) incurred by the OWNERS in
relation to the carriage of such cargo.
(iv) The OWNERS shall permit passengers including film or T.V.
personnel to travel aboard the submersible NAUTILE but those
passengers will be carried at their own risk and subject to
satisfactory medical assessment.
ARTICLE 8 - MASTER AND CREW
(A) For the purpose of this Article, the CHARTERER'S representative at
sea shall deal solely with the OWNERS' Senior Representative at sea and the
OWNERS will implement the CHARTERERS wishes in respect of the Master, Engineer
and Crew in relation to this Article. OWNERS's Senior Representative at sea is
Mr Pierre VALDY or any other person designated in writing by the OWNERS.
(B) The OWNERS shall get the master to carry out his duties promptly and
the Vessel shall render all reasonable services within her capabilities by day
and by night and at such time and on schedules as the CHARTERERS may reasonably
require without any obligations of the CHARTERERS to pay to the OWNERS or the
Master, Officers or the Crew of the Vessel any excess or overtime payments. The
Master through OWNERS Senior Representative shall be under the orders of the
CHARTERERS as regards employment, agency and other arrangements. The Master and
Engineer shall keep full and correct logs accessible to the CHARTERERS or their
agents. The Master shall sign cargo documents as and in the form presented.
(C) If the CHARTERERS have reason to be dissatisfied with the conduct of
the Master or any Officer, Engineer or member of the Crew, the OWNERS on
receiving particulars of the complaint shall promptly investigate the matter
and, if, in their opinion, it is necessary and practicable, make a change in the
appointment.
<PAGE> 5
ARTICLE 9 - DEVIATION TO ASSIST
The Vessel shall be entitled at all times to assist vessels and other
property in distress, to deviate for the purpose of saving life or property and
for that purpose to call at any port or ports for fuel and/or other supplies and
to carry cargo on or under deck. Such deviation shall be considered as a period
of hire.
ARTICLE 10 - SALVAGE
All salvage (other than might be determined to arise from the activities
described in Box 12) and assistance to other vessels shall be for the OWNERS'
and the CHARTERERS' equal benefit after deducting the Master's and Crew's
proportion and all legal and other expenses including hire paid under the
Charter for time lost in the salvage, repairs or damage and oil consumed. The
CHARTERERS shall be bound by all measures taken by the OWNERS in order to secure
payment of salvage and fix its amount. CHARTERERS agree and if within their
control shall so arrange that all salvage assistance unless alternative terms be
agreed with OWNERS, shall be on terms of Lloyd's Open Form "no cure-no pay".
The OWNERS shall indemnify and hold harmless the CHARTERERS from any
claim for salvage made by the Master, any crew servant of agent of the Owner.
If any conflict arises between this Article and Article 21 then the
latter shall prevail.
ARTICLE 11 - LIEN
The OWNERS shall have a lien upon all cargoes for all claims against the
CHARTERERS under this Charter and the CHARTERERS shall have a lien on the Vessel
for all moneys paid in advance and not earned. CHARTERERS will not suffer, nor
permit to be continued, any lien or encumbrance incurred by them or their
agents, which might have priority over the title and interest of the OWNERS in
the Vessel.
CHARTERERS shall indemnify and hold OWNERS harmless against any lien of
whatsoever nature arising upon the Vessel during the Charter period while she is
under the control of CHARTERERS, and against any claims against OWNERS arising
out of the operation of the Vessel by CHARTERERS or out of any neglect of
CHARTERERS in relation to the Vessel or the operation thereof.
Should the Vessel be arrested by reason of claims or liens arising out of
her operation hereunder by CHARTERERS, CHARTERERS shall at their own expense
take all reasonable steps to secure that within a reasonable time the Vessel is
released and at their own expense put up bail to secure release of the Vessel.
ARTICLE 12 - SUB-LET
Subject to the prior written approval of the OWNERS, the CHARTERERS shall
be authorized of sub-letting the vessel to any person or company not competing
with the OWNERS.
<PAGE> 6
ARTICLE 13 - WAR - FORCE MAJEURE
13.1. WAR
(A) The Vessel, unless the consent of the OWNERS be first obtained, not
to be ordered nor continue to any place or on any voyage nor be used on any
service which will bring her within a zone which is dangerous as the result of
any actual or threatened act of war, war, hostilities, warlike operations, acts
of piracy or of hostility or malicious damage against this or any other vessel
or its cargo by any person, body or State whatsoever, revolution, civil war,
civil commotion or the operation of international law, nor be exposed in any way
to any risks or penalties whatsoever consequent upon the Imposition of
sanctions.
(B) If as a result of such aforementioned acts or warlike operations the
Vessel is prevented from carrying out her duties under this Charter agreement,
both the OWNERS and the CHARTERERS may cancel the Charter and, unless otherwise
agreed, the Vessel to be redelivered to the OWNERS in port of re-delivery
defined in Box 8.
The OWNERS shall not be liable for the consequences of such early
termination of the Charter agreement and the total Charter hire defined in Box
13 shall be paid to the OWNERS.
13.2. FORCE MAJEURE AND STRIKE
(A) If as a result of Force Majeure or strike of the crew, the Vessel
and/or the submarine is prevented from carrying out her/their duties under this
Charter agreement, both the OWNERS and the CHARTERERS may terminate this Charter
agreement and, unless otherwise agreed, the Vessel to be redelivered to the
OWNERS in port of re-delivery defined in Box 8.
(B) In such case the Charter hire defined in Box 13 shall be reduced
proportionally to the number of days actually performed as follows :
Charter hire = US $ 1 050 000 x (number of days actually performed /
38 days)
After lowering of the Charter hire, the OWNERS shall not be liable for
the direct and indirect consequences, including consequential losses, loss of
profit, of such early termination of the Charter agreement and CHARTERERS shall
indemnify and hold harmless the OWNERS against all and any claim made by third
parties.
ARTICLE 14 - GENERAL AVERAGE
General Average to be adjusted according to York/Antwerp Rules, 1974.
Hire not contribute to General Average.
ARTICLE 15 - BOTH-TO-BLAME COLLISION SUBCLAUSE
If the Vessel comes into collision with another ship as a result of the
negligence of the other ship and any act, neglect or default of the Master,
mariner, pilot or the servants of the OWNERS in the navigation or the management
of the Vessel, the CHARTERERS will indemnify the OWNERS against all loss or
liability to the other or non-carrying ship or her owners in so far as such loss
or liability represent loss of or damage to, or any claim whatsoever of the
owners of any goods carried under this Charter paid or payable by the other or
non-carrying ship or her owners to the owners of the said goods and set-off,
recouped or recovered by the other or non-carrying ship or her owners as part of
their claim against the Vessel or the owners. The foregoing provisions shall
also apply where the owners, operators or those in charge of any ship or ships
or objects other than or in addition to the colliding ships or objects are at
fault in respect of a collision or contact.
<PAGE> 7
ARTICLE 16 - STRUCTURAL ALTERATIONS - DURABLE BREAK-DOWN
(A) The CHARTERERS shall have the option of making at their expense
structural alterations to the Vessel with the written consent of the OWNERS, but
unless otherwise agreed, the Vessel is to be re-delivered re-instated to her
original condition. The Vessel is to remain on hire during any period of these
alterations or re-instatement.
(B) In case of break-down affecting durably technical or operational
capabilities of the Vessel NADIR or the submersible NAUTILE before or after
their delivery defined in Box 7, both the OWNERS and the CHARTERERS shall be
entitled to terminate this Charter agreement.
In such case the Charter hire defined in Box 13 shall be reduced
proportionally to the number of days actually performed as follows :
Charter hire = US $ 1 050 000 x (number of days actually performed /
38 days)
After lowering of the Charter hire, the OWNERS shall not be liable for
the direct and indirect consequences, including consequential losses, loss of
profit, of such early termination of the Charter agreement and CHARTERERS shall
indemnify and hold harmless the OWNERS against all and any claim made by third
parties.
ARTICLE 17 - ARBITRATION
Any dispute arising under this Charter which cannot be settled in an
amicable manner be referred to arbitration in London according to the rules and
regulations of the International Chamber of Commerce of LONDON.
This Charter agreement shall be governed by English law.
ARTICLE 18 - POSITION OF TITANIC WRECK
OWNERS warrant that they have accurate knowledge of the exact position of
the "TITANIC" wreck and undertake to bring the vessel to such position and to
dive their submersible on the TITANIC SITE (as defined in Article 19). OWNERS
undertake to supply the TITANIC's accurate position to the CHARTERERS. The
CHARTERERS will not unnecessarily divulge the position of the "TITANIC" wreck to
any third party.
ARTICLE 19 - DEFINITION OF THE SITE
"THE SITE" is : Two nautical miles around NADIR when NAUTILE is diving on
the TITANIC wreck.
ARTICLE 20 - OPERATION OF THE SUBMERSIBLE NAUTILE
20.1. Organisation aboard the VESSEL NADIR
CHARTERERS unique representative aboard the VESSEL is Mr George TULLOCH
or any other person designated by Mr George TULLOCH in writing to the Master of
the VESSEL.
On the day before a Nautile's dive an "operation order" will be drafted
by both OWNERS and CHARTERERS representatives.
After each Nautile's dive a "daily work-report" will be drafted by both
OWNERS and CHARTERERS representatives.
An operation order form and a daily work report form are annexed herewith
as Exhibit D.
<PAGE> 8
20.2. Normal operation of the submersible NAUTILE
Provided that weather conditions permit dive operations, the NAUTILE
shall perform one dive during each period of 24 hours on SITE.
A dive shall be considered as performed in so far as the submersible has
stayed a minimum period of one hour on the seabed.
20.3. Bad weather conditions :
By bad weather conditions is to be understood wind storm superior to 25
knots or through of wave superior to 2 metres or fog which may make work
dangerous or hazardous.
If bad weather conditions were to prevent the NAUTILE from diving during
the period of hire, the global Charter hire defined in subclause 25.1. here
above shall be unchanged.
20.4. Non durable technical failure :
a) If during the period of hire, the NAUTILE submersible is unable to dive due
to a technical failure, i.e. technical breakdown, crew illness or any other
reason under the control of the OWNERS during a total period(s) exceeding an
aggregate of 48 hours, the amount defined in subclause 25.1. hereafter shall be
lowered of 15.000 US $ for each period totalling 24 hours without dive for
technical failure arising after the said period(s) aggregating 48 hours.
b) If the NAUTILE submersible does not make any dive due to technical failure,
then the OWNERS shall refund to CHARTERERS all sums paid under subclause 25.1.
and shall release CHARTERERS from any further obligations under this Charter
agreement.
c) After lowering of the amount according to paragraph a hereabove or after
refunding of the sums according to paragraph b hereabove, OWNERS shall have no
further obligations or liability to the CHARTERERS and CHARTERERS shall
indemnify and hold harmless OWNERS against all and any claim made by third
parties related to the technical failure, including consequential, incidental or
special damages and including, without limitation, loss of profits.
20.5. Safety conditions related to Nautile submersible operation
The following safety rules and conditions shall apply to all NAUTILE operations
at sea :
a) Since NAUTILE is diving together with an other ROV on the same
site, a representative of the OWNERS on board the NADIR is
designated as Director on SITE and is invested with the direction
of all underwater and surface operations. If one of the following
rules or conditions is not fulfilled, the Director on SITE may
decide to stop the NAUTILE dives and, in such case, the total
Charter hire defined in Box 13 remains due to the OWNERS.
Operations plan and procedures have to be agreed upon by all
parties on SITE prior to any common NAUTILE - ROV dive.
b) The NAUTILE is not allowed to dive if it appears that any acoustic
interference perturbates its own positioning system, arising from
the operation of an other underwater vehicle or vessel on SITE.
c) A two nautical miles area around the NADIR position is defined as
"restricted area". All vessels intending to penetrate inside this
"restricted area" have to obtain prior authorization from the
NADIR Captain. It is the responsibility of the CHARTERERS, which
has a title on the Titanic, to enforce such restriction.
<PAGE> 9
d) While NAUTILE is diving, only the vessels duly authorized by the
Director on SITE can approach within 800 metres of the NAUTILE
vertical. Failure to observe this obligation would result in
immediate stand-by of the NAUTILE.
e) Two OWNERS representatives will be embarked on board the "Abeille
Supporter" Vessel during all operations related to the ABYSSUB, as
soon as the Abeille Supporter Vessel leave the harbour BAYONNE
(FRANCE).
f) The quality of intercommunication between NADIR and the "Abeille
Supporter" permitting the exchange of information related to the
positioning of submersibles and the communication between the
Director on SITE and the ABYSSUB Supervisor is considered as
essential regarding safety rules. The installation or the
operation of the navigation bi directional videolink is under
CHARTERERS's responsibility.
In the event the intercommunication become perturbated,
NAUTILE dives shall immediately be stopped.
g) During the common dives of NAUTILE and other ROV's, the access to
NADIR navigation bridge will be forbidden to all people not
authorized by the Director on SITE.
h) A common dive of NAUTILE and ROV shall only be authorized by the
Director on SITE, if a representative of the OWNERS has carried
out before the common dive a test and a positive valuation of the
ROV installation and equipment, including cable and winch, and of
the working methods of the ROV operator.
i) A common dive of NAUTILE and ROV shall only be authorized by the
Director on SITE, if a representative of the OWNERS has carried
out, before the common dive a test and a positive valuation of the
safety device designed to prevent a sinking of the ROV cable in
the event of cable breaking or in the event of breakdown of the
winch brake.
j) The above defined security rules and procedures between NADIR and
Abeille Supporter/Abyssub shall entirely apply to all ROV or
Support Vessel which will be added or come in substitution to the
"Abeille Supporter" Vessel or to the ABYSSUB, in case of their
defection.
k) One IFREMER representative shall be authorized to embark on ROV
support Vessel on site at any time during ROV operations.
20.6. Recovery of the big piece
Considering the recovery of the big piece, the OWNERS shall
perform the following tasks :
a) to install on the seabed the line equipped with float and
deadweight equipments, according to OWNERS engineering study which
is subject of a separate agreement between CHARTERERS and OWNERS.
b) to order the acoustic dropping of the last deadweight before
recovery on CHARTERERS demand.
c) to assure the conduct of the ascent, excluding any intervention
after the recovery system has reached the surface.
The above tasks no. b and c can be performed by Abeille Supporter upon of
written demand of the CHARTERERS.
<PAGE> 10
20.7. Installation of equipment on the NAUTILE and on the NADIR
The installation of equipment belonging to the CHARTERERS on the NAUTILE
and on the NADIR shall be done by the CHARTERERS under the supervision of the
OWNERS.
The OWNERS may prevent the CHARTERERS from installing certain equipments
on the NAUTILE for technical reasons.
In any case, the OWNERS shall not be liable if the equipment belonging to
the CHARTERERS do not work correctly. The NAUTILE is to be re-instated to her
original condition, before redelivery. The NAUTILE is to remain on hire during
any period of these reinstatements by the CHARTERERS.
ARTICLE 21 - RECOVERY OF OBJECTS
21.1. OWNERS will forthwith hand over to the CHARTERERS all objects
collected on or from the Titanic SITE during the performance of
this Charter agreement.
OWNERS and CHARTERERS will draw up a list of objects
recovered under this Charter. OWNERS renounce all property rights
in the objects collected during the expedition performed under
this Charter agreement, both for themselves and on behalf of the
Master, Officers, crew, servants and agents, provided all payments
defined in Article 25 be made to the OWNERS.
The OWNERS shall have a lien against all objects recovered
during the 1998 TITANIC expedition until the revenues defined in
Article 25 hereafter are received by the OWNERS.
The CHARTERERS shall provide free of charge assistance to
the OWNERS to register and maintain the OWNER's lien on the
recovered objects in any country designated by the OWNER's.
21.2. Owing to the fact that the objects collected by OWNERS on behalf
of the CHARTERERS are not the property of OWNERS, the CHARTERERS
shall indemnify and hold harmless OWNERS against all and any claim
related to the recovery of the aforementioned objects excepting
always any claims made by any master, crew, agents, servants or
employees of OWNERS.
CHARTERERS shall reimburse OWNERS of all legal expenses
incurred by OWNERS in connection with such claims.
CHARTERERS shall not sell the artefacts collected by OWNERS
to any individual or private collector, but shall use them only
for exhibition purposes. However the collection may be sold to any
entity that will make them available for exhibition to the public.
For the purposes of this Charter agreement an artefact is
defined as any object collected from the RMS TITANIC that was
either a part of the ship or a possession of a person on board.
Coins, currency, diamonds (non jewelery), precious metals, gems
stones, coal, etc. are not considered artefacts.
21.3. OWNERS shall not be responsible for the conditioning and
preservation of these objects on board the Vessel but will assist
CHARTERERS in bringing artefacts on board.
<PAGE> 11
21.4. OWNERS shall be entitled to collect a few specific samples of the
Titanic wreck only for scientific experimental purposes in
corrosion research and/or biological research, and such results
will be provided to the CHARTERERS.
The selection of samples and the collection of the same
shall be mutually agreed between the representative of OWNERS and
of the CHARTERERS on the Vessel and the collection of these
samples shall in no way interfere with the CHARTERERS use of the
Vessel.
ARTICLE 22 - AUDIO VISUAL RIGHTS AND OTHER COMMERCIAL RIGHTS
22.1. CHARTERER's media rights
(A) The CHARTERERS is authorized by the OWNERS to film the
operations at sea, but the CHARTERERS shall not install cameras
filming the VESSEL crew 24 hours a day. The CHARTERERS shall at
all times have and be entitled to the benefit of all media, T.V.,
audio-visual rights relating to and arising from the activities of
the charter provided the CHARTERERS quote the OWNERS as the
performer of the expedition.
(B) All logos appearing on the Vessel will remain as they are and
where they are ; nevertheless the CHARTERERS shall have the right
to place such additional logos as they wish on the Vessel and/or
ancillary equipment and/or overalls in such a position that they
wish, provided that such positioning shall not interfere with the
operation of the Vessel or any part of it or obscure any of OWNERS
or other logos or names currently on the Vessel and its ancillary
equipments.
(C) In the same way the OWNERS shall be permitted to have its crew
wearing overalls with its logo.
22.2. OWNERS media rights
(A) In recognition of the fact that OWNERS are a French Public
Agency, OWNERS shall be entitled to inform the French speaking
news agencies (not magazines) and domestic French T.V. agencies
other than those in Canada of the RMS TITANIC expedition performed
under this Charter agreement.
All press materials, releases and other information
regarding the RMS Titanic expedition intended to be distributed to
the media shall be prepared by CHARTERERS or CHARTERERS' public
relations consultants and provided in advance to OWNERS, and
CHARTERERS and OWNERS shall communicate in advance regarding such
releases, provided that CHARTERERS may select the release date.
The images and sound sources to be transmitted by news
agencies and TV news will be supplied to OWNERS no later than
their transmission date to the CHARTERERS own medias.
The OWNERS shall be kept informed of the performance of the
Expedition.
In any case, OWNERS actions shall in no way affect the
commercial value to the CHARTERERS or its assigns of the media
literary and merchandising rights and/or interests all of which
are reserved exclusively to the CHARTERERS.
<PAGE> 12
OWNERS shall have access free of charge to all non
confidential still images approved by the CHARTERERS for
distribution to the French speaking news agencies and French
speaking T.V. news agencies (but not magazines) other than those
in Canada with the express consent of the CHARTERERS.
OWNERS will be authorized to use film footage selected with
CHARTERERS. Such film footage will be used free of charge by
OWNERS for distribution to French speaking T.V., news agencies
(other than those in Canada).
The OWNERS are hereby also authorized to offer free of
charge to such channels the following footage to be included in
news broadcast : the 88 second extract of the film "La face cachee
de la terre" concerning RMS Titanic produced by the OWNERS,
provided that for the period from the commencement of the
expedition until 90 days after its conclusion, OWNERS shall not
make copies of such footage available to any person or entity.
(B) OWNERS shall also have the right to use free of charge the
above mentioned images for their own communication and advertising
with the express consent of the CHARTERERS.
(C) All press conferences or announcements of the Expedition, both
before the Expedition and after, shall be communicated among the
parties in order to allow real time broadcast.
(D) OWNERS shall receive an advance copy of CHARTERERS media plan
developed by CHARTERERS or CHARTERERS's public relations
consultant.
22.3. After the 1998 Titanic Expedition, the CHARTERERS shall notify the
OWNERS before entering into any contract for any film or book
relating to the RMS TITANIC expeditions or to the Titanic SITE and
shall allow OWNERS a period of 60 days to decide whether to
participate in any such film or book.
22.4. Previous Agreements
This Agreement cancels and supersedes all previous Agreements
related to Charter agreements or other commitments concerning
TITANIC Expeditions.
ARTICLE 23 - FUTURE EXPEDITIONS ON THE TITANIC SITE
23.1. In the event the OWNERS will be approached during the years 1998
to 2005 by an entity other than the CHARTERERS in order to perform
similar expeditions on the TITANIC SITE, the OWNERS shall grant a
first refusal right to the CHARTERERS in order to allow them to
participate in a new TITANIC expedition.
The first refusal right has to be exercised by the
CHARTERERS within 90 days after notice given in writing by the
OWNERS.
<PAGE> 13
23.2. In the event the CHARTERERS intend to plan additional expeditions
to the Titanic SITE during the years 1998 to 2005, the CHARTERERS
shall grant a first refusal right to the OWNERS in order to allow
them to participate in an new TITANIC expedition.
The first refusal right has to be exercised by the OWNERS within
90 days after notice given in writing by the CHARTERERS.
23.3. It is being precised that for the enforcement of the above
provisions, OWNERS and CHARTERERS will not perform expeditions
more than once a year.
ARTICLE 24 - LIABILITY FOR OPERATIONS AT SEA
24.1. OWNERS warrant that the NADIR is seaworthy and fit in all aspects
for her duties under this charter.
24.2. The navigation management and operation of the NADIR, the diving
operations and the overall safety of the NADIR and all loss
damages costs expenses and liabilities arising out of or connected
therewith shall be to sole responsibility of the OWNERS.
OWNERS shall be solely liable for all loss damages expenses
and claims for death or for personal injury to any Master, crew,
servant, agent or employee of OWNERS or any other person on board
the NADIR at their request and for all damage or loss caused to or
incurred by the NADIR or other property of OWNERS or OWNERS itself
arising out of or in any way connected with the performance of the
work at sea or sub-sea under this Charter, howsoever caused.
Subject to subclause 24.3. hereof, OWNERS shall be liable
for all loss damages, expenses or costs suffered or incurred in
connection with claims made by third parties excepting the
journalists, T.V. companies and all persons invited on board by
the CHARTERERS and OWNERS shall indemnify and hold harmless the
CHARTERERS from all claims for such losses, damages, expenses,
costs.
Nothing in this subclause or in the Charter agreement as a
whole may be regarded as transferring the aforesaid
responsibilities and liabilities to the CHARTERERS.
OWNERS shall not however be liable for loss or damage
caused to the objects from the wreck of RMS TITANIC from the time
of collection or recovery by OWNERS until such objects are handed
over to the CHARTERERS pursuant to subclause 21.1.
24.3. The CHARTERERS shall be solely liable for all loss damages
expenses and claims for death or for personal injury to any
passenger or other person (not being the Master, crew servant
agent or employee of OWNERS) on board the NADIR at their request
or with the knowledge or consent of the CHARTERERS.
The CHARTERERS shall be responsible for all loss or damage
to objects from the wreck of the TITANIC after they are handed
over by OWNERS. For the avoidance of doubt the CHARTERERS and his
insurance companies waive any right to sue the OWNERS in respect
of all matters covered by this subclause.
<PAGE> 14
24.4. In the event the Big Piece cannot be recovered or if the Live Show
transmission cannot be performed for technical or safety reasons
or for weather conditions, since such recovery and transmission
are technological challenges which have never been done before on
the TITANIC SITE, the OWNERS shall not be liable for any direct or
indirect consequences, including consequential losses, loss of
profit and the CHARTERERS shall indemnify and hold harmless the
OWNERS from all claims for such losses, damages, expenses, costs.
The CHARTERERS shall obtain such waiver from all its
partners, sponsors, contractors and subcontractors.
ARTICLE 25 - CHARTER HIRE AND CONDITIONS OF PAYMENT
25.1. The global charter hire for the basic charter period of 38 days
shall be a lump sum of US $ 1 050 000 (US Dollars One Million
Fifty Thousand).
The CHARTERERS shall transfer by wire the amount of US $
1 050 000 to IFREMER :
CREDIT LYONNAIS
Unite d'Appui Commercial Champs-Elysees
UB COMEX
Account no. 307 T
11, rue d'Argenson
75008 PARIS - FRANCE
Fax no. 33 1 49 24 54 25 - Phone : 33 1 49 24 54 27
with following conditions of payment :
- US $ 850 000 upon signature of this agreement.
- US $ 200 000 upon redelivery of the Vessel according to Box 8.
If the CHARTERERS do not make payment of the first instalment
mentioned hereabove in due time, this Charter agreement shall be
cancelled and OWNERS are released from their obligation to deliver
the VESSEL and submarine.
In this event, all the partial payments made by the CHARTERERS for
the engineering and equipment which are subject of a separate
agreement shall be forfeited to the OWNERS and the OWNERS shall be
released from all obligations and liabilities to the CHARTERERS.
25.2. Except as provided in Articles 13.2., 16 and 20.4., it is
understood that the Charter hire is payable whatever will be the
number of dives performed by IFREMER.
ARTICLE 26 - COMPLETE AGREEMENT
This CHARTER contains the entire agreement between the OWNERS and the
CHARTERERS and supersedes all previous written or oral agreements.
<PAGE> 15
ARTICLE 27 - OTHER COMMITMENTS OF THE CHARTERERS
27.1. Upon signature of this agreement, the CHARTERERS will cooperate in
linking, at IFREMER's request, IFREMER's web site with CHARTERER's
one and with any other web site related to the TITANIC project.
27.2. During the 1998 TITANIC expedition, the CHARTERERS will not engage
IFREMER nor GENAVIR personnel without the previous written consent
of IFREMER.
ARTICLE 28 - NOTICES
All notices required or contemplated by this CHARTER and particulary for
the performance of Articles 8, 13.2., 16 and 22.3. hereabove, shall be in
writing and shall be deemed effective upon personal delivery, receipt of telex,
telefax, certified mail, return receipt requested, addressed to the parties at
their respective addresses as set forth below, or to such other addresses by
written notice delivered in accordance with this section :
If to: IFREMER
Centre de Toulon
Direction de l'Ingenierie, de la Technologie et de
l'Informatique
Zone Portuaire de Bregaillon
83507 LA SEYNE-SUR-MER CEDEX
FRANCE
PHONE: 33 4 94 30 49 18
TELEFAX: 33 4 94 87 83 07
For the attention of Mr Pierre VALDY
If to: RMS TITANIC, INC
17, Battery Place
Suite 203
NEW YORK, NY 10004
UNITED STATES OF AMERICA
PHONE: 1 212 558 6300
TELEFAX: 1 212 482 1912
For the attention of Mr George TULLOCH
Executed this 20 day of July 1998,
at Issy-les-Moulineaux
For and on behalf of OWNERS For and on behalf of CHARTERERS
/s/ P. David /s/ G.H. Tulloch
P. DAVID G.H. TULLOCH
IFREMER RMS TITANIC
President and Chief Executive Officer President and Chief Executive Officer
<PAGE> 16
APPENDIX "A" TO THE CHARTER AGREEMENT
Name of VESSEL NADIR
SUPPORT VESSEL for UNDERWATER RESEARCH
- main characteristics :
class of VESSEL : BV + 1 - 3 - 3 E (haute mer) Glace III
length overall : 55,75 m
beam overall : 11,89 m
draught max : 4,68 m
depth moulded : 5,50 m et main deck
displacement : 2 025 tons
deck cargo : 360 tons
deck area : 33 m x 11 m
deadweigh : 1 173 tons
- main propulsion:
o four engines, total output 2 400 HP
o two engines on each controllable pitch propeller
o auxiliary propulsion : grill jet bow thruster 420 HP
o electrical power 970 KVA
380 V 50 Hz 3 phases
- Equipment
Satellite navigation system
Telephone - telex by IMMARSAT NMR 111 02 25
- facilities for carrying Nautile
- one special stern gantry (20 tons)
- one rolling platform for transfering the submersible to the workshop
- facilities for carrying major surface equipment
- one main crane (3 tons at 14,7 m)
- laboratory containers (20')
- accomodation, officers and men : 17
- technical personnel : 15
- passengers : 9
<PAGE> 17
APPENDIX "B" TO THE CHARTER AGREEMENT
PARTICULARS OF VESSEL'S EQUIPMENT
NAUTILE
manned submersible
o depth rating 6 000 m
o weight in air 18,5 T
o length 8,00 m
o width 2,70 m
o height 3,45 m
o pay-load (without ROBIN) 200 kg
manned sphere
o crew 1 pilot - 1 navigator (Owner)
o passenger *
o inside diameter 2,10 m
o sphere material titanium allog
o view ports
number 3
diameter 120 mm
pitch and trim control with mercury pump 12(degrees)
power system : lead acid 40 Kwh
propulsion : 1 axial motor
2 vertical thrusters
2 lateral thruster
highspeed 2 knots
underwater range at 1 knot : 6 miles
autonomy
safety 130 hours
standard dive 5 hours on bottom
* a medical certificate is required attesting for passage non claustrophobia, no
heart problem, aptitude for normobar diving.
<PAGE> 18
telemanipulation
o 2 manipulators
communications
o 1 underwater telephone
o miscellaneous equipments
o 1 scanning sonar
o 1 TV camera 3 CCD
o 2 photo cameras
o 6 external lights
o 1 dead reckoning
An acoustic LBL positioning system will be supplied to position Nautile
on the seabed.
<PAGE> 19
APPENDIX "C" to the CHARTER AGREEMENT
PARTICULARS OF VESSEL's EQUIPMENT
R.O.V. ROBIN
- - Tethered remote operated vehicle powered and controlled from the Nautile
max. operating depths 5 000 m
neutral umbilical length 70 m
weight 130 kg
dimensions L 0,67 m
W 0,70 m
H 0,55 m
forward speed up to 1 knot
propulsion 4 oil filled electrical thrusters
(5 kg thrust each)
sensors - kow drift gyro
- high accuracy pressure sensor
auto heading and auto depth capability
light 2 x 250 W quartz iodide
1 x 100 W quartz iodide
television 1 colour low ligth
2 black and white
still picture camera (option)
strobe head lOO j (option)
emergency locator flashes
telemetry MUX date and video
<PAGE> 20
APPENDIX D (1) CONTRACT Nr 98/1213037/F
TITANIC 1998
on NADIR (date)
DIVING WORK REPORT dive NMR :
on bottom from to
Equipments operated VIDEO :
STILL CAMERA :
MANIPULATORS :
ROBIN :
TIVA :
OTHER :
Surface meteo conditions :
Report of dive chronology :
Problems if any :
CHARTERERS REPRESENTATIVE IFREMER REPRESENTATIVE
<PAGE> 21
APPENDIX D (2) CONTRACT Nr 98/1213037/F
TITANIC 1998
on NADIR (date) :
OPERATION ORDER for dive NMR :
- Pilot :
- Copilot :
- Passenger :
- ROBIN NO YES
- TIVA NO YES
Ideal chronology of bottom operations
Time Ops
PRIORITIES VIDEO :
(indicate priority number) STILL CAMERAS :
FILM :
ROBIN :
ARTEFACTS RECOVERY :
OTHER :
CHARTERERS REPRESENTATIVE IFREMER REPRESENTATIVE
<PAGE> 22
1
A75/CG
ENGINEERING AND SUPPLY OF BIG PIECE RECOVERY
EQUIPMENT AND OF LIVE SHOW EQUIPMENT
Agreement nr 98/1213041/F
Between:
RMS TITANIC INC., 17, Battery Place, Suite 203 New-York 10004 - UNITED
STATES OF AMERICA, hereafter called RMS TITANIC and represented by Mr George
TULLOC'H, President and Chief Executive Officer
on one hand,
And:
The INSTITUT FRANCAIS DE RECHERCHE POUR L'EXPLOITATION DE LA MER, a
public institution of an industrial and commercial nature, hereafter called
IFREMER having its headquarters at Issy-Les-Moulineaux - 92138 CEDEX FRANCE -
155, rue Jean-Jacques Rousseau and represented by its President and Chief
Executive Officer or its Delegate
on the other hand,
THE FOLLOWING HAS BEEN LAID DOWN
<PAGE> 23
2
ARTICLE 1 - PURPOSE
1.1. - This Agreement has for purpose to define the conditions under which RMS
TITANIC entrusts IFREMER with the study and supply of Big Piece recovery
equipment and the study and supply of part of live show equipment, the
((Equipment)).
The Equipment shall be used during an expedition on the TITANIC site that
will take place in August 1998.
1.2. - The scope of work and the Equipment are defined in Appendix 1 hereafter
attached.
ARTICLE 2 - AMOUNT
2.1. - The amount of this Agreement is fixed to the lump sum of US $ 610 000.
2.2.- It shall be paid by transfer to the following account :
CREDIT LYONNAIS
Unite d'Appui Commercial Champs-Elysees
UB COMEX
Account no. 307 T
11, rue d'Argenson
75008 PARIS
FRANCE
Fax: no. 33 1 49 24 54 25
Phone : no. 33 1 49 24 54 27
2.3. - This amount shall be paid upon following conditions :
o US $ 200 000 at the date of June 1st, 1998
o US $ 410 000 upon signature of this Agreement
<PAGE> 24
3
ARTICLE 3 - PROPERTY
The engineering studies, designs, plans and Equipment manufactured under
this Agreement and the results obtained shall be the property of IFREMER.
IFREMER grants to RMS TITANIC the right to use the Equipment for future
expeditions on the Titanic wreck, if operated by IFREMER and if the Equipment is
in order to operate.
ARTICLE 4 - RESPONSIBILITY
In the event the Big Piece cannot be recovered or if the Live Show
transmission cannot be performed for technical and safety reasons or for weather
conditions, since such recovery and transmission are technological challenges
which have never been done before on the TITANIC site, IFREMER shall not be
liable for any direct or indirect consequences, including consequential losses,
loss of profit.
RMS TITANIC shall obtain such waiver from all its partners, sponsors,
contractors and subcontractors.
ARTICLE 5 - DURATION
This Agreement comes into force upon its signature. It will expire on
December 31, 1998, except the provisions of article 3 and 4 hereabove which
remain valid.
ARTICLE 6 - APPLICABLE LAW - DISPUTES
This Agreement is governed by the laws of France.
Any dispute between IFREMER and RMS TITANIC which cannot be settled
amicably shall be heard before the Tribunal de Grande Instance de Nanterre,
France.
<PAGE> 25
4
ARTICLE 7 - APPENDIX
- Appendix 1 : - Scope of work and list of equipment.
Made at Issy-Les-Moulineaux
on July 2Oth, 1998
For RMS TITANIC For IFREMER
/s/ George Tulloch /s/ Pierre David
Pierre DAVID,
President Directeur General
<PAGE> 26
5
APPENDIX 1 TO THE AGREEMENT NR 98/1213041/F
SCOPE OF WORK
1. ENGINEERING:
BIG PIECE
Engineering study of recovery solutions for Big Piece Recovery:
- - Big Piece situation:
Big Piece historic
Big Piece description
Big Piece location
Environmental conditions
- - Technical solutions for Big Piece recovery:
Recovery with buoyancy
Recovery with cable
Recovery with Grab
Solution recommendation
- - Technical description
- - General procedure
- - Recovery ship proposal
- - Cost estimate of the recovery operation
Detail engineering of recovery equipment and procedures
Equipment fabrication follow up and test
PART OF LIVE SHOW:
Engineering study and procurement follow up.
- -ROV/Nautile connection and procedures (including safety issues)
- -Robin improvements
- -ROV/Nautile linked Nav
<PAGE> 27
6
2 EQUIPMENT:
BIG PIECE:
- - 6 x 3 tons BAGS (color: orange) with Ifremer and Pronal marking and improved
filling pipe and protections
- - 2 x Totally equipped lift lines with surface recovery line
- - 18 tons Sheave for recovery ship (tested 36 tons)
- - Dead weight: composed of individually weighed chains (196 kg each)
- - Complementary rigging: Slings, hooks, shackles, 400 m coaxial rope (28 mm OD)
- - Spare parts for pumping installation (pump, motor)
PART OF LIVE SHOW:
ROV/Nautile interconnection link:
- - Electric connection with 25 m oil filled hose and Ocean Design connectors
- - 50 m electric jumper with ocean design connectors
- - Spare connectors
- - 2000 m fiber optic connection with opto electronic at both end in aluminium
canisters and Ocean Design connectors (2 video up plus bi-directional RS 232
link)
- - Spare fiber optic spool
- - Spare electronic boards
The limit of IFREMER supply and responsibility is defined in attached
specification 1
Robin improvements:
- - 3 Deepsea Power lights
- - Spare lights
- - Wide and narrow beam reflectors
- - 1 or 2 Hitachi mono CCD Camera or other
These improvements will be tested and installed if improved results are
obtained.
ROV/Nautile linked Nav:
- - Nadir power supply for Transmitters
- - Graphic/ Video converter
- - Spare converter
- - NTSC Monitor
The limit of IFREMER supply and responsibility is defined in attached drawing 2.
<PAGE> 28
7
INTERCONNECTION EQUIPMENT SPECIFICATION
GENERAL:
The purpose of the interconnection equipment is to supply a video/audio link
between the manned submarine Nautile and the surface via a remote control
vehicle deployed near Nautile from an electro optical umbilical (Fig:1).
This complete link is composed of different equipments supplied by the different
partners. The different equipments and the related interfaces are defined here
after (Fig:2).
NBC CONTROL PANEL:
The NBC control panel including NBC video recorder will be mounted inside
Nautile on a 19 inches vertical rack (14 inches high: 8 units, 35Omm depth).
All the control panel components will have to pass through the hatch with a
maximum available diameter of 450 mm.
The control panel will integrate NBC needs as video switchers, video recorder,
Audio/RS 232 boards, video amplifiers ...
It will be supplied by Nautile: 28 V DC +/- 20 %, 15 A
It will supply the opto electronic with 48 V DC (50 W). As the receptacle
installed on Nautile is not insulated (when not connected), this supply has to
be switchable on the two lines (+ and -).
The receptacles and connectors which are not BNC will be seat by Ifremer to NBC
(and Ifremer will prepare its wiring with the same connectors)
All electric grounds have to be insulated from Nautile mechanical ground. If
insulation is made with capacitors, not chimical capacitor have to be used and
insulation has to be greater than 1 M ohms.
IFREMER LINK:
Ifremer will supply:
- - The in and out supply and RS 232 cables for NBC Control panel with Ifremer
connectors
- - All the in and out video cables with BNC connectors
- - The external cables and connectors of the link until the ROV Junction box
- - The Fiber Optic Interconnection System (FOIS) which will allow long range
connection (up to 2000m) instead of pure electrical connection which will allow
only 25 m range connection.
For information submarine connectors are made by Ocean Design.
They are wired in equipressure through tygon tube filled with oil. The 25 m hose
connected on the ROV is a reinforced Ocean Design hose able to transmit
traction forces without breaking the wires.
The receptacle will be permanently attached on the 5 functions right
manipulator.
The connector will be handled with the 7 functions left manipulator
<PAGE> 29
8
TRAVOCEAN LINK:
Travocean is in charge of the connection of the 25 m Ocean Design hose on the
ROV junction box. The diameter of this cable is specified on the attached data
sheet. Travocean will connect the wires in function of the diagram shown on
figure 2. Travocean will supply 48V DC (50 W) for opto electronic. Although the
connector is insulated on ROV side, it should be preferable to have the power
switchable.
Travocean is in charge to supply the floor where the 25 m hose will be attached
and to install forwards, the dummy receptacle for connector housing. The
connector will be ready to be handled by Nautile with 7 functions left
manipulator for direct connection or with ROV manipulator for connection through
F015.
SURFACE NBC USE:
It is not the purpose of this document to define how NBC will use the
interconnection equipment and what video/audio performances they will obtain.
For information, it may be interesting to describe the electrical components of
the complete video link from NBC Nautile Control Panel to Surface NBC use.
From NBC Nautile Control Panel / BNC connector / 2 m RG 59 coax / Not coaxial
penetrator / 2m RG 59 coax / Jupiter not coaxial connector /5 m RG 59 coax / Not
coaxial Ocean Design submarine connector /5 in RG 59 coax / Not coaxial Deutch
connector / 1 m RG 59 coax / BNC connector / Radiall opto electronic / Radiall
FO Connector / 2000 m SM FO through ECA penetrators / Radiall FO connector /
Radiall opto electronic / BNC connector / 1 m RG 59 coax / Not coaxial Deutch
connector / 5 m RG 59 coax / Not coaxial Ocean Design submarine connector /25 m
RG 59 coax / BNC connector /2 m RG 59 / Not coaxial connector / 1 m RG 59 coax /
BNC connector / Video switcher / BNC connector / 1 m RG 59 coax / Not coaxial
connector / 2m RG 59 coax / BNC connector / 137 m RG 59 coax / BNC connector /
Not coaxial slip ring / BNC connector / 2 m RG 59 coax / Not coaxial connector /
1 m RG 59 coax / BNC connector / Opto electronic / FO connector / 2 m SM FO
with penetrator / FO connector / 5000 m SM FO / FO connector / Opto Electronic /
BNC connector / 5 m RG 59 coax / Not coaxial slip ring / 5 m RG 59 coax / BNC
connector / To NBC Use.
All coaxes are RG59 or equivallent inside Nautile.
The RS 232 link is 0,5[2] twisted/ shielded pair uses the same lengths and the
same numbers of connectors that the video link.
<PAGE> 1
AGREEMENT
Agreement, dated as of July 20, 1998 (this "Agreement"), by and between
RMS Titanic, Inc. (The "Customer"), a corporation organized under the laws of
the State of Florida corporation with offices located at 17 Battery Place, Suite
203, New York, New York 10004, and Oceaneering International, Inc.
("Oceaneering"), a corporation organized under the laws of the State of
Delaware, USA, with offices located at 501 Prince George's Boulevard, Upper
Marlboro, Maryland 20774.
RECITALS
WHEREAS, the RMS Titanic sank in approximately 12,000 feet of water at a
place located approximately 400 miles south of Newfoundland ("Project Site"),
and Customer has an interest in proceeding to the Titanic Project Site for the
purpose of obtaining video documentation of the wreck, supporting completion of
a television series, including a live video feed to national television
audiences, and of performing scientific tasks; and
WHEREAS, Oceaneering is experienced in underwater Remotely Operated
Vehicle ("ROV") operations; and
WHEREAS, Customer wishes to engage Oceaneering to exercise Oceaneering's
best efforts to proceed to the location designated by Customer and operate
Oceaneering's Magellan 725 ROV System (the "Magellan") to obtain broadcast
quality video of the Titanic, to provide umbilical and mother ROV pass through
support to Customer Supplied Equipment as defined in Exhibit B (hereinafter
referred to as "Customer Supplied Equipment"), and to place and retrieve
non-hazardous microbiological test apparatus, and to recover objects at the
Project Site consistent with the Magellan's lifting capabilities (such as coal
or other small objects); and
WHEREAS, the broadcast quality video cameras will be provided by others,
along with interfacing assistance; and the Customer Supplied Equipment will be
provided by others, along with interfacing assistance; and
WHEREAS, Oceaneering has agreed to provide such services upon the terms
set forth herein.
NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Services. During the time period set forth on Exhibit A hereto, Oceaneering
shall provide the Magellan and appropriate crew therefor and use its best
efforts operate the Magellan, in accordance with the terms set forth herein, to
obtain broadcast quality video of the Titanic, to
<PAGE> 2
provide umbilical and mother ROV pass through support to, Customer's Supplied
Equipment, and to place and retrieve non-hazardous microbiological test
apparatus, as more specifically set forth below.
2. The Vessel
The Customer shall provide the M/V OCEAN VOYAGER (Vessel) to support the
Customer Supplied Equipment and the operations described herein. If necessary
and with Customer's approval, Oceaneering shall make a representative available
under this Agreement to inspect the Vessel with the understanding that the
Oceaneering representative, in his reasonable opinion, can request Vessel
modifications essential to interfacing the Magellan to the Vessel. The
involvement of Oceaneering in requesting or approval of modifications to the
Vessel does not in any way lessen the Customer's complete and total
responsibility for all aspects of the Vessel. The Customer shall be responsible
for all direct and indirect costs associated with provision and operation of the
Vessel, including but without limitation to: vessel hire, fuel lube oil,
victualing, port/dock fees, garbage removal, security guards, pilotage,
anchorage, agent's fees, surveys, gas-freeing, communications, etc.
Oceaneering acknowledges that it has received and review the "Safety
Requirements" set forth in Section 20.5 of the Agreement between Customer and
French Institute for the Research and Exploration of the Seas ("IFREMER"),
relating to the vessel "The Nadir", which shall also be at the site during the
expedition to the Titanic. Oceaneering accepts and agrees to comply with such
"Safety Requirements".
3. Pre-mobilization, Mobilization and Demobilization
3.1 Oceaneering shall participate with others, including Nauticos LLC and
Woods Hole Oceanographic Institution, to interface the Customer Supplied
Equipment and the broadcast video equipment, respectively, to the Magellan
system. In all cases Oceaneering shall have approval authority regarding such
interfaces and the potential impact on the safe and effective operation of the
total interfaced system. Oceaneering will not be responsible for the Customer
Supplied Equipment nor warranty the working of the said equipment.
3.2 Oceaneering shall mobilize the Magellan system and eight (8)
operating Personnel at the Port of Boston. Oceaneering shall transport Personnel
to Boston, and in general, will equip the Customer supplied Vessel with the
Magellan system, making her ready for the activities required under this
Agreement. The Customer's representative on board the vessel shall direct the
Vessel to the location of the Titanic. At the end of the operational activities
and upon return of the Vessel to Boston, Oceaneering shall offload and
demobilize the Magellan system. Oceaneering shall instruct the Crew to use best
efforts to carry out the services set forth herein promptly and within the
Magellan system's capabilities by day and by night in accordance with
<PAGE> 3
this Agreement and at such time and on schedules as the Customer may reasonably
require without any obligations of the Customer to pay to Oceaneering or its
crew any excess or overtime payments. If the Customer has reason to be
dissatisfied with the conduct of any member of the Crew, Oceaneering on
receiving particulars of the complaint shall promptly investigate the matter
and, if, in their opinion, it is necessary and practicable, make a change in the
appointment.
3.3 Oceaneering shall advise the Customer of the expected date of arrival
of the Magellan system at Boston. The Customer will ensure the Vessel is in
Boston and available for onload of the Magellan system during the period 24 July
1998 to 29 July 1998 and shall use commercially reasonable effort to make the
Vessel available and ready for the onload of the Customer Supplied Equipment as
soon as reasonably possible. There shall be no additional charge for the
Customer Supplied Equipment for any delays following its arrival at Boston,
while standing by for on-load availability. The operation will terminate on or
about 01 September and the vessel will return to Boston and be immediately
offloaded. Should Customer extend the Magellan beyond 01 September 1998,
Customer agrees to pay a day rate in the amount of U.S. Fifteen Thousand Dollars
($15,000) per day until such time as the Magellan has departed the RMS Titanic
to return to Boston.
4. Costs. The cost for the Equipment, Consumables (estimated) and all Personnel
for the operation, to be paid by Customer to Oceaneering, is as set forth in
Exhibit C (Oceaneering's Proposal dated 05/14/98). If during the period of hire,
the Magellan is unable to dive due to a technical failure, i.e. technical
breakdown, crew illness or any other reason under the control of Oceaneering
during a total period(s) exceeding an aggregate of 48 hours, the amount paid by
Customer to Oceaneering shall be lowered, for each period totaling 24 hours
without dive for technical failure arising after the said period(s) aggregating
48 hours by $4,500. If the Magellan System does not make any dive due to
technical failure of the Magellan System, then Oceaneering shall refund to
Customers all sums paid hereunder, and shall release Customers from any further
obligations under this Agreement excluding mobilization costs.
5. Payment Terms. Customer shall remit to Oceaneering the amount of US $600,000
via wire transfer, to the account set forth on Exhibit A, pursuant to the
payment terms set forth on such Exhibit A. In addition, Customer has agreed to
an additional payment amount of $45,000, for modifications to the Magellan.
Oceaneering hereby confirms that such $45,000 has been paid on behalf of
Customer prior to execution this Agreement. Oceaneering further confirms that
there has been made on behalf of Customer the first payment due in accordance
with such Exhibit A (i.e. $120,000) prior to execution of this Agreement. Upon
completion of each milestone listed on Exhibit A, Oceaneering will submit an
invoice to Customer via facsimile (addressed to the attention of Eloise
Patterson, facsimile number 301-986-4828). Customer agrees to remit payment to
Oceaneering via wire transfer within two business days of receipt of each such
faxed invoice.
<PAGE> 4
Oceaneering has no obligation to remain at the Project Site and may
demobilize at any time the daily rate and charges incurred or to be incurred for
requested services that have not been paid by Customer when due. Customer agrees
to return back to Boston of off-load the Magellan.
Time is of the essence with respect to all payments to be made by
Customer. Failure of Customer to timely make any payment when due is cause for
suspension of performance by Oceaneering and/or termination of the Agreement by
Oceaneering without prejudice to any sums that may be due Oceaneering under the
Agreement.
6. Best Efforts. The undertaking of Oceaneering under this Agreement is to put
forth its best efforts to photo/video document the Wreckage, and to recover
objects at the Project Site consistent with the Magellan's lifting capabilities
(such as coal and other small objects) utilizing the Magellan System, as
interfaced with the Customer Supplied Equipment and cameras, and Personnel
herein specified and relying upon the information provided by the Customer.
Because of inherent and unforeseeable risks in seabed operations, the Customer
assumes the risk of location of the Wreckage and the success of obtaining, and
the usefulness of the photo/video documentation as information, and if the
Customer objectives are not achieved, unless as a result of the gross negligence
or willful misconduct of Oceaneering or its Crew, and except as a result of the
technical failure of the Magellan System as set forth above, Oceaneering shall
nevertheless be entitled to full mobilization and demobilization fees, the
applicable day rates for Magellan System and Crew, and all other fees and
charges due Oceaneering under this Agreement. With respect to the Customer
Supplied Equipment, Customer acknowledges that Oceaneering does not warrant nor
assume any liability for the operational performance or interfacing of the
Customer Supplied Equipment with the Magellan.
7. Liability and Insurance For purposes of this Clause 7, the term "Oceaneering,
ET AL" is used as a reference individually and collectively for Oceaneering and
its parent, subsidiary and affiliated companies, Oceaneering's subcontractors
and all other parties with whom Oceaneering has a contractual relationship
(excluding Customer) and its and all of their officers, directors, employees,
agents, assigns, representatives, contractors, and subcontractors, and the
subrogees of said parties. Similarly, the term "Customer, ET AL" is used as a
reference individually and collectively for Customer and its parent, subsidiary
and affiliated companies and its and their officers, directors, employees,
agents, assigns representatives, contractors, and subcontractors, and the
subrogees of said parties.
A. Customer's Liability and Indemnity. Other than as a result of the gross
negligence or willful misconduct of Oceaneering, Customer shall be solely
responsible for and shall protect, defend, indemnify and hold harmless
Oceaneering, et al and any vessel owned, operated or controlled by Oceaneering,
et al from and against any and all claims, demands, judgments, awards, debts,
damages, losses, causes of action, suits, expenses and costs arising out of or
in connection with illness, injury to or death of employees of Customer, et al
or damage to or loss
<PAGE> 5
of any property or equipment owned, operated or controlled by Customer, et al
and in any way sustained or alleged to have been sustained in connection with or
by reason of Oceaneering, et al's performance of the work.
B. Oceaneering's Liability and Indemnity. Other than as a result of the gross
negligence or willful misconduct of Customer, Oceaneering shall be solely
responsible for and shall protect, defend, indemnify and hold harmless Customer,
et al and any vessel owned, operated or controlled by Customer, et al from and
against any and all claims, demands, judgments awards, debts, damages, losses,
causes of action, suits, expenses and costs arising out of or in connection with
illness, injury to or death of employees of Oceaneering, et al or damage to or
loss of any property or equipment owned, operated or controlled by Oceaneering,
et al and in any way sustained or alleged to have been sustained in connection
with or by reason of Customer, et al's performance of the work.
C. Other than as a result of the gross negligence or willful misconduct of
Customer, Oceaneering shall be responsible for and defend, indemnify and hold
harmless Customer, et al and any vessel owned, operated or controlled by
Customer, et al for any loss or damage arising from pollution emanating from the
equipment or vessels owned, operated or controlled by Oceaneering, et al and
irrespective of the negligence or other fault of Customer et al. Other than as a
result of the gross negligence or willful misconduct of Oceaneering, Customer
shall be responsible for and defend, indemnify and hold harmless Oceaneering, et
al and any vessel owned, operated or controlled by Oceaneering, et al for any
loss or damage from pollution emanating from equipment or vessels owned,
operated or controlled by Customer, et al or from pollution, contamination or
seepage which may result from fire, pipeline, well or reservoir damage or any
other manner as a result of the performance of the work by Oceaneering.
D. Insurance. Irrespective of the negligence (sole, concurrent, or gross) or
other fault of an indemnified party, the parties shall cause to be carried
insurance sufficient to cover their respective indemnification obligation under
this Agreement.
E. Loss or Damage occasioned during operations authorize by Customer which are
extra hazardous or otherwise out of the normal course of operation will be for
the account of the Customer, whose responsibility shall be to reimburse for
actual cost of items lost or damages. Customer's authorization to conduct
Hazardous Operations will be obtained prior to commencement of operations and
approval will be evidenced by signature on the daily log by the Customer's
representative designated in writing by the Customer pursuant to Exhibit A.
F. In the event of a claim that the salvage of items or artifacts form the
Project Site is in violation of applicable law or rights claimed by others,
Customer agrees to defend, indemnify and hold harmless Oceaneering, its
subsidiaries, and their officers, directors, employees, agents and
representatives and the Vessel harmless from and against all losses, damages or
judgments incurred by the indemnified parties, including the costs and expenses
of defending any claim,
<PAGE> 6
including reasonable attorney's fees. Customer at its option shall have the
right at its sole expense to defend any such claim, provided it furnishes
Oceaneering with security deemed adequate for any possible judgment.
8. Hazardous Operations. For the purposes of this clause, Hazardous Operations
shall mean operating the Customer Supplied Equipment from the Magellan. In the
event the Magellan is lost or damaged due to the operation from the Magellan of
the Customer Supplied Equipment, Customer shall be solely responsible for the
repair and/or replacement of the Magellan and defend, indemnify and hold
harmless Oceaneering for any claims arising out the loss or damage to Customer
Supplied Equipment. Customer's insurance coverage shall be primary with respect
to a loss as a result of Hazardous Operations.
9. Limitation of Liability. In no event shall a party be liable to the other
party hereto for any consequential or indirect loss or damage whether arising
under contract, admiralty, tort or otherwise by operation of law and whether or
not foreseeable at the date hereof howsoever caused.
10. The ROV Operations
10.1 The Customer's representatives on board the Vessel shall supervise
the voyage from the Port of Boston to the Titanic site (the Operation Area).
10.2 Oceaneering shall prepare the equipment for the operation, shall
work with the other equipment providers to complete interfacing the Customer
Supplied Equipment and cameras, and shall operate the Magellan system in the
Operation Area. Continuously during periods where the weather and sea states
permit, and during periods where the necessary emissions from the global
positioning satellite are received, Oceaneering shall conduct operations in
accordance with an agreed Titanic detailed operations plan, set forth in Annex
A, as nearly as navigational equipment, ship handling, weather, and sea states
permit. Annex A will be prepared and coordinated prior to commencement of ROV
operations. Oceaneering, within the applicable operational constraints, will use
its best endeavors to maximize ROV operations and effectiveness.
10.3 In case of break-down affecting durably technical or operational
capabilities of the Magellan System before or after the delivery to Customer,
Oceaneering shall use best efforts to restore the same as quickly as possible.
11. Government Approvals. Customer shall bear the responsibility for obtaining
any necessary government approvals including without limitation permission of
the government having jurisdiction under international law over the Operations
Site.
<PAGE> 7
12. Force Majeure. Neither party shall be liable for failure to perform or delay
in performance when such failure or delay shall be occasioned by external causes
beyond the control of the parties, including among such causes (but without in
any way limiting the generality of the foregoing), acts of God, weather and sea
conditions; insurrection, riot, fire, terrorism, piracy, strikes or other labor
difficulty, embargoes, and war and other armed conflict. Nothing herein shall
excuse Customer from making payments that are due Oceaneering under this
Agreement.
13. Governing Law. The validity, construction and performance of this Agreement
and the rights and obligations of the parties arising in connection with this
Agreement, shall in all respects be governed by the laws of Texas, excluding the
conflicts of law rules, and by the applicable maritime law of the United States
of America.
14. Jurisdiction. The Parties agree to the exclusive jurisdiction of courts of
competent jurisdiction situated in Harris County, Texas for the resolution of
any controversy or claim arising out of or in relation to this Agreement or
breach thereof.
15. Entire Agreement. The terms and conditions of this Agreement, read with
Exhibit A, B and C constitute the entire agreement between the parties and any
amendment thereof shall have no force or effect unless recorded in writing and
signed by or on behalf of both parties. This Agreement may be signed in separate
counterparts, each of which shall be deemed an original.
In Witness Whereof, the parties hereto have executed this Agreement as of
the date first written above.
RMS TITANIC, INC.
/s/ George Tullech by AHC
- --------------------------------------------
By: George Tullech by Allan H. Carlin, its counsel
Its: President
OCEANEERING INTERNATIONAL, INC.
/s/ Donald R. Dean
- --------------------------------------------
By: Donald R. Dean
Its: Vice President, Cable Operations
<PAGE> 8
EXHIBIT A - PAYMENT TERMS
The following are the Payment Terms as referred to in Article 5.
1. 20% Due upon contract signing. Also at contract signing, the costs for
any agreed modifications to the MAGELLAN 725 for the Titanic
Expedition. (Both amounts previously paid; Oceaneering acknowledges
receipt thereof.)
2. 20% Upon completion of system mobilization onto Customer-supplied vessel
(Assumed that payment will be due on July 29, 1998).
3. 20% Two (2) weeks after departure from mobilization port (Assumed
payment will be due on August 13, 1998).
4. 20% Upon departure from site (Assumed payment will be due on September
2, 1998.)
5. 20% Upon completion of demobilization from the vessel at the
demobilization port (Assumed payment will be due on September 8,
1998.)
<PAGE> 9
EXHIBIT B
Additional Terms
A. All items supplied to Customer and authorized in advance in writing. e.g.
video tapes, film, etc., will be charged at cost plus fifteen percent
(15%) (authorizations to be on a daily basis.)
B. If the Operations extend beyond forty five (45) days, the operations crew
will be rotated approximately every 45 days. The cost of the rotation and
transportation of personnel will be to Customer's account.
C. Except for initial mobilization and demobilization, all customs, entrance
fees, duty, carnet, dockage, etc., incurred during the period of the
charter will be charged to the Customer's account at cost plus fifteen
percent (15%).
D. Extra services, materials, fabricating ship modifications, additional
equipment installation, crew and equipment ordered and approved in
writing by Customer and Oceaneering will be charged to the Customer at
cost plus fifteen percent (15%).
E. Customer shall appoint its own customs broker/shipping agent for any
equipment, parts or artifacts owned by Customer.
F. Customer's designated representative: Allan H. Carlin
G. Customer Supplied Equipment
o T-Rex MiniROV. This is a miniROV being built specifically for this
project to allow penetration into the TITANIC hull to obtain video of
areas which cannot be reached by the Magellan, or which would be deemed
unsafe for Magellan. The vehicle has been designed to work with Magellan
as a "mother" or support platform and T-Rex is considered sacrificial to
protect and insure recovery of Magellan. Customer representatives and
Oceaneering personnel have had ongoing discussions of interface
requirements, weights, and deployment options. Final evaluations of
integration and operation issues will be made jointly during the
mobilization period. The vehicle specifications and requirements are as
follows:
Vehicle in-air weight 300 lbs.
Vehicle in-water weight Neutral
Vehicle Dimensions 32" x 26" x 19"
Tether in-air weight 100 lbs.
Tether in-water weight 30 lbs.
<PAGE> 10
Tether length 300 feet.
Power and Signal
120 VAC@ approx 20 amps (single phase)
one bidirectional RS-422 channel@ up to 38.4 Kbaud one coax for
connection to one of the Magellan video uplink channels
o Remora MiniROV. This is a MiniROV which has been built for other similar
applications, and which is being upgraded with a Woods Hole supplied
camera system to serve as a backup for either the T-Rex system or for use
on one of the other support platforms being utilized for this project in
a similar manner. This assures a backup vehicle capability through the
live broadcast period. In regards to its use with Magellan support, a
joint evaluation will be made and emergency backup plans generated during
the mobilization period.
<PAGE> 11
EXHIBIT C
[OCEANEERING LETTERHEAD]
TELEFAX
Number of Pages: (Includes cover) 3
REF: DRD-099/514
DATE: 14 May 1998
TO: TITANIC
ATTN: George Tulloch
FAX NO: 212-482-1912
FROM: Donald R. Dean
SUBJECT: MAGELLAN 725 System
As per our conversations over this week, OCEANEERING thanks you for the
opportunity to provide a quotation for our MAGELLAN 725 system to support the
TITANIC operation which will take place in July/August 1998. Our proposal
consists of the following:
o Mobilizing the MAGELLAN 725 and crew to Boston
o Loading and unloading the MAGELLAN 725 onto customer supplied vessel.
o The MAGELLAN 725 and crew for 45 days total.
o Demobilization of the MAGELLAN 725 and crew
TOTAL PROJECT COST $600,000 USD
The total project cost is based on the MAGELLAN 725 system as is without any
changes to the basic system and personnel necessary to operate the system for 24
hours a day throughout the complete project. Any changes required to the system
to meet customer requirements will be performed at cost plus.
Mobilization / Demobilization
MAGELLAN 725 System
The cost provided will include the following items:
o System preparation for the operation including a complete operational
check-out.
o System packing for shipment
o Round trip shipping to Boston.
o Round trip personnel transportation to Boston.
<PAGE> 12
OPERATIONS
The cost is based on the following schedule:
o Mobilization on board the vessel July 22 through 27
o Transit to site
o Operations on site through September 1
o Return transit to Boston
o System offload
The MAGELLAN system is presently available. The cost of ship modifications,
welding, cranage etc required to install and remove the Magellan 725 from
customer supplied vessel will be provided by the customer at no cost to
OCEANEERING. If additional time is required or the schedule extends beyond
the stated times, then the extra days will be charged out at the following
Day Rates:
<TABLE>
<CAPTION>
<S> <C>
Operations: $15,000 USD
Standby: $12,500 USD
</TABLE>
TERMS AND CONDITIONS
1. This offer is made subject to the availability of equipment and personnel
at time of award, and to a mutually acceptable Form of Contract.
2. Rates quoted are exclusive of video tapes, photographic material and any
yet to be identified "job-specific" consumable which will be re-charged
at documented cost plus 10%.
3. Rates quoted are exclusive of all foreign income taxes (Corporate and
Personal), value added taxes (VAT), visa costs, Customs, import and agent
fees, local licenses/fees, and all other "special" charges of a similar
nature. All such costs incurred by Oceaneering will be invoiced to
Customer at our cost plus fifteen percent (15%). This invoice is payable
in full to Oceaneering in United States Dollars and is to be deposited
directly into our designated bank in the United States.
4. Client/Company shall provide the following services at no cost to
Oceaneering: quayside, offshore cranage and transportation,
sea-fastening, welding, testing and subsequent removal of the ROV system
onboard Company Vessel, suitable stable electrical power for proposed ROV
system and associated equipment, accommodation, victualing and reasonable
business communications for Oceaneering' s personnel.
5. Client will provide for all work permits and visas, and will pay for all
taxes and duties according to the law, rules, and regulations of the
authorities concerned.
6. Oceaneering would reserve the right at any time to assign our
sub-contract, if we are the successful bidder, to any other Company
within the Oceaneering group of companies.
<PAGE> 13
7. Oceaneering would reserve the right to be reimbursed at documented cost
plus 15% for the provision of any reporting that may ultimately be
required.
8. This offer is valid for thirty (30) days from the date of submission and
subject to revalidation thereafter.
We look forward to working with you on the TITANIC Project.
Sincerely,
/s/Donald R Dean
Donald R. Dean
Vice President, Cable Operations
<PAGE> 1
TABLE OF CONTENTS
Page
----
RECITALS .................................................................1
I. Definitions .......................................................1
II. The Expedition ....................................................4
III. Financing the Expedition ..........................................8
IV. Exclusive Access Rights ...........................................9
V. Media Coverage ...................................................11
VI. The Programs; Production of the Programs; Program Budget .........12
VII. Ownership of Programs; Use of Programs ...........................13
VIII. Ownership and Exploitation of Expedition Recordings ..............14
IX. Discovery Home Video Exploitation ................................18
X. On-Line Exploitation .............................................18
XI. Promotional Reel .................................................19
XII. Exhibition of Artifacts; Corporate Sponsorships of Exhibition ....20
XIII. Merchandising Rights .............................................20
XIV. Rights in the Image ..............................................20
XV. First Negotiation Right ..........................................21
XVI. Agents' Fees .....................................................21
XVII. Representations and Warranties ...................................21
XVIII. Confidentiality ..................................................22
XIX. Indemnity ........................................................22
<PAGE> 2
XX. Notices ..........................................................23
XXI. Relationship of Parties ..........................................23
XXII. Default ..........................................................23
XXIII. Miscellaneous ....................................................24
-ii-
<PAGE> 3
Agreement, dated as of July 15, 1998 (this "Agreement"), by and between
Discovery Communications, Inc. ("Discovery"), a Delaware corporation having its
principal place of business at 7700 Wisconsin Avenue, Bethesda, Maryland 20814
and RMS Titanic, Inc., a Florida corporation having its principal place of
business at 17 Battery Place, Suite 203, New York, New York 10004 ("RMST").
RECITALS
The parties hereto are involved in the undertaking of the Titanic
shipwreck scientific research expedition and recovery operation by RMST that is
scheduled to occur during the period (the "Expedition Period") of August 3, 1998
through September 1, 1998 (the "Expedition") and the production and delivery of
the documentary television programs described below on the subject of the
Titanic shipwreck and the Expedition (the "Programs" and, together with the
Expedition, are referred to collectively as the "Project").
In consideration of the foregoing and of the mutual promises and
covenants hereinafter set forth, the parties hereto hereby agree as follows:
I. Definitions. As used herein, the following terms shall have the
respective meanings set forth below:
A. "Discovery Programming Services" shall mean ah programming
services in which Discovery at such time has an ownership interest
or controls or shares control of programming decisions, or to
which Discovery supplies programming in a block for exhibition,
including, without limitation, under the names and marks "TDC",
"Discovery Channel", "TLC", "The Learning Channel", "Animal
Planet", "The Travel Channel", "Discovery Kids", "People + Arts",
"Wings", "Discovery En Espanol" and any other Discovery trademarks
and any other logos or variations incorporating the same.
B. "Electronic Media Rights" shall mean the rights to reproduce,
copy, modify, adapt, create derivatives, use or otherwise exploit
any portion of any work in combination with or as a composite of
other content of any nature, including, without limitation, text,
data, photographs, illustrations, and/or video or audio segments,
and to record or otherwise store the resulting combination or
composite product on any physical electronic medium from which the
contents can be accessed and retrieved by means of a central
processing unit, whether now known or hereafter to become known,
including, without limitation, magnetic tape, diskette,
interactive CD, CD-ROM, laser disk, optical disk, integrated
circuit card and chip and to distribute the resulting combination
or composite product on such medium by any means, where such
resulting composite product is of an interactive nature.
C. "Expedition Recordings" shall mean (i) the Wreck Site Recordings
and (ii) all other audio recordings, still photographs and film,
video and other motion
<PAGE> 4
picture images (in all formats and however recorded) made by or on
behalf of (on behalf of does not include Stardust or any other
entity or individual retained by Discovery) RMST in the North
Atlantic during the Expedition.
D. "Footage Rights" shall mean the right to license the use of
limited portions of a production for inclusion in an unrelated
production, which unrelated production may be exploited in any
media.
E. "Home Video Rights" shall mean the rights to distribute, license,
sell, rent and/or otherwise exploit (collectively "distribute" or
"distribution" as applicable) an audio-visual work on video
cassettes, videodiscs or in any other analogous format now known
or hereafter invented, for private viewing of the visual images
and synchronized audio-track by means of a playback device which
causes a visual image of the work to appear on the screen of a
television receiver or comparable device, where both the playback
device and the receiver are located in consumer homes.
Notwithstanding the foregoing, Home Video Rights does not include
any Electronic Media Rights involving interactive technology.
F. "Last Premiere" shall mean the date of the world premier of the
Science Program.
G. "NBC" as defined in Section IIC.
H. "NBC Programs" shall mean the live "Dateline" segment covering the
Expedition, the segment of the "Today Show" covering the
Expedition and segments of news broadcasts on NBC incorporating
Expedition Recordings.
I. "NBC Recording" shall mean recordings (audio, visual, etc.) taken
at the Wreck Site during the Expedition, which recordings contain
therein an NBC correspondent.
J. "Net Revenue" shall mean have the meaning set forth on Schedule 1
hereto.
K. "Non-Standard Television Rights" shall mean any and all forms of
television distribution, exhibition and display, whether now
existing or hereafter developed, other than by the exercise of
Standard Television Rights, including, without limitation,
exploitation on a subscription, license, rental, sale or other
basis (but not including theatrical exhibition to paying
audiences, Home Video Rights and Non-Theatrical Rights).
Non-Standard Television Rights shall include, but not be limited
to, exhibition by cable, pay cable, "over-the air pay" or
subscription television, master antenna, low power television,
closed circuit,
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<PAGE> 5
hotel (for private in-room viewing only), multipoint distribution
service and direct broadcast satellite service, video-on-demand
and near video-on-demand.
L. "Non-Theatrical Rights" shall mean the distribution of a work in
all formats and by all means of technology now in existence or
hereafter discovered (other than Television) to schools,
libraries, churches, museums, hospital, prisons, summer camps,
airline, cruise and other markets customarily referred to as
"in-flight" or "transportation", or private businesses; provided,
that Non-Theatrical Rights shall not include (i) any distribution
to any person, entity or venue (including, without limitation,
those described above, cinemas and concert halls) for any
exploitation or exhibition to audiences where a charge for
admission is made and (ii) any Electronic Media Rights or any
other distribution involving or utilizing computer or other
interactive technology (including, without limitation, video
discs).
M. "Other Productions" shall mean productions for exhibition in all
or any media format, whether now existing or hereinafter created,
for theatrical and non-theatrical purposes, and which are either
(i) intended for initial exhibition in all or some part of the
world via a Discovery Programming Service, regardless of whether
or not Discovery is the copyright proprietor of such Other
Production (i.e., Discovery's Footage Rights will apply to
Discovery-owned productions as well as productions and presales in
which exhibition rights for Discovery Programming Services are
merely licensed), or (ii) are produced or co-produced by Discovery
or an affiliate thereof.
N. "On-Line Rights" shall mean the right to reproduce, copy, modify,
adapt, create derivatives, use or otherwise exploit any portion of
any work in combination with or as a composite of other content of
any nature, including, without limitation, text, data,
photographs, illustrations for video or audio segments, and to
store the resulting combination or composite product in one or
more central processing units for the purpose of permitting third
parties to access and retrieve portions of such resulting product
by means of any public or proprietary on-line computerized
interactive information retrieval network or system.
O. "Standard Television Rights" shall mean conventional, over-the-air
television distribution of programming by a UHF or VHF television
broadcast station, the video and audio portions of which are
intelligibly receivable without charge by means of standard roof
top or television set built-in antennas; provided, that broadcasts
like those in England by the BBC shall be considered to be the
exercise of Standard Television Rights.
P. "Stills" are still photographic images.
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<PAGE> 6
Q. "Television Rights" shall mean Standard Television Rights and
Non-Standard Television Rights.
R. "Titanic Image" shall mean an image of any of (i) the Titanic, as
it appears on the ocean floor, (ii) the debris field surrounding
the Titanic, or (iii) an artifact recovered from the wreck site of
the Titanic during the Expedition.
S. "Wreck Site Recordings" shall mean all audio recordings, still
photographs and film, video and other motion picture images (i)
(in all formats and however recorded) made undersea or on the
ocean floor at or in the vicinity of the Titanic wreck site during
the Expedition, and (ii) taken during the Expedition of artifacts
recovered from the wreck site during the Expedition, in each case,
exclusive of such images which contain therein an image of NBC
personnel and do not contain a Titanic Image.
II. The Expedition. The Expedition shall consist of the following activities
and events:
A. Vessels. The vessels (collectively, the "Vessels") that will be
participating in the Expedition are the following (and it shall be
a precondition to the effectiveness of this Agreement that RMST
shall have entered into each of the charter agreements described
below):
(i) The Ocean Voyager vessel, together with its submersibles
and other assets and facilities (the "Ocean Voyager")
belonging to Aqua+, a subsidiary of the Canal+ Group
("Aqua+"), which vessel shall be chartered by RMST,
pursuant to a Charter Agreement to be entered into between
RMST and Aqua+ (the "Ocean Voyager Charter Agreement"). The
Ocean Voyager Charter Agreement shall provide, without
limitation, that:
(a) the Ocean Voyager shall contain thereon at least all
of the equipment listed on Schedule 1(a) hereto;
(b) the term of the charter shall be for 41 days; and
(c) the cost of the charter, including for food and
fuel, shall be $600,000.
In no event shall RMST execute the Ocean Voyager Charter Agreement
unless Discovery has reviewed and consented to the form and
substance thereof, which consent shall not be unreasonably
withheld. Discovery hereby acknowledges that the form and
substance of the charter agreement for the Ocean Voyager entered
into by RMST in connection with the 1996 expedition
-4-
<PAGE> 7
to the Titanic, as modified to reflect the provisions of
subdivisions (a) through (c) of this subparagraph (i), is
acceptable to Discovery.
(ii) The Nadir vessel, together with its submersible the Nautile
and other assets and facilities, (the "Nadir") belonging to
the French Institute for the Research and Exploration of
the Seas ("IFREMER") pursuant to an agreement between RMST
and IFREMER (the "IFREMER Charter Agreement"), which
IFREMER Charter Agreement shall provide, without
limitation, that:
(a) the Nadir, together with the Nautile, shall contain
thereon all equipment required to support live
television programming of the Expedition;
(b) the term of the charter shall be for 38 days, and
Punta Delgada shall be the home port; and
(c) the cost of the charter, including for crew, food,
fuel and engineering to support live television
programming of the Expedition, shall be $1,150,000
(provided that such amount does not include the fee
of $30,000 for "connectors" required for the live
broadcast, which fee shall be paid by or on behalf
of Discovery);
In no event shall RMST execute the IFREMER Charter Agreement
unless Discovery has reviewed and consented to the form and
substance thereof. Discovery hereby acknowledges that the form and
substance of the charter agreement for the Nadir entered into by
RMST in connection with the 1996 expedition to the Titanic, as
modified to reflect the provisions of subdivisions (a) through (c)
of this subparagraph (i), is acceptable to Discovery.
(iii) The Abeille Supporter vessel together with its remote
operating vehicle the Abyssub ROV 1 and other assets and
facilities, (the "Abeille") belonging to Travocean,
pursuant to an agreement between RMST and Travocean (the
"Travocean Agreement"), which Travocean Charter Agreement
shall provide, without limitation, that:
(a) the Abeille, together with the Abyssub ROV 1,
Nautile, shall contain thereon such equipment as
required to support live television programming of
the Expedition;
(b) the term of the charter shall be for 37 days, and
Bayonne, France shall be the home port; and
-5-
<PAGE> 8
(c) the cost of the charter, including for crew, food,
fuel and engineering to support live television
programming of the Expedition, shall be $950,000
(RMST has prepaid $250,000 of such amount, which
$250,000 shall be reimbursed by Discovery not later
than 7 business days from the date this Agreement is
executed and delivered by the parties hereto);
In no event shall RMST execute the Travocean Agreement unless
Discovery has reviewed and consented to the form and substance
thereof, which consent shall not be unreasonably withheld, and
Discovery hereby consents to the execution by RMST of the
Travocean Agreement in the form attached hereto as Schedule II(a)
(iii).
(iv) The Magellan 725 ROV vessel together with its other assets
and facilities, (the "Magellan") belonging to Oceaneering,
pursuant to an agreement between RMST and Oceaneering (the
"Oceaneering Agreement"), which Oceaneering Agreement shall
provide, without limitation, that:
(a) the term of the charter shall be for 41 days; and
(b) the cost of the charter, including for crew, food,
fuel and mobilization and demobilization costs and
travel expenses of personnel shall be $600,000.
In no event shall RMST execute the Oceaneering Agreement unless
Discovery has reviewed and consented to the form and substance
thereof, which consent shall not be unreasonably withheld.
B. Imaging. In addition to the Vessels, Discovery intends to enter
into agreements with Polaris, the Willards, Meridian and Woods
Hole Oceanographic Institute, and/or Billy Lange and Dave Gallo
(collectively, the "Imaging Entities") to provide at sea
operations and equipment coordination during the Expedition to
acquire Wreck Site Recordings of the Titanic wreck site, including
installation and supervision of camera equipment, and all
necessary personnel to achieve deep penetration imagery, and to
survey the debris field, create a "mosaic" of the bow and stern,
and create from the "mosaic" a three dimensional computer
generated rendition of the Titanic wreck site as it appears on the
ocean floor (such computer generated rendition, the "Image"). The
aggregate consideration to be paid for such services shall not
exceed $1,000,000. Discovery shall ensure that each agreement
entered into with an Imaging Entity shall contain an
acknowledgment from such Imaging Entity that RMST is the sole
owner of the copyrights and all other
-6-
<PAGE> 9
rights in and to all still photographs and film, video and other
motion picture images of the Titanic and the surrounding debris
field obtained by such Imaging Entity during the Expedition,
including, without limitation, the mosaic and the Image and that
all of the same shall have been created on a work-for-hire basis,
as such term is defined by the U.S. Copyright Act. To the extent
that Discovery has any ownership rights therein, Discovery hereby
assigns all such ownership rights therein to RMST. Each such
Imaging Entity shall be licensed only such limited use of the
images created thereby as are required for the performance of the
applicable agreement therewith, and, as agreed by RMST, for
limited use as set forth on Exhibit IIB hereto. Discovery hereby
covenants and agrees that it shall not grant to any Imaging Entity
rights to use Expedition Recordings, or any other rights, which
would be greater than rights granted to Discovery herein, on which
would otherwise constitute or cause a breach of this Agreement.
C. NBC Live Services. Discovery intends to enter into an agreement
with the National Broadcasting Corporation or an affiliate thereof
("NBC"), pursuant to which NBC shall provide live production
components and technical assistance for the Expedition. Discovery
hereby covenants and agrees that it shall not grant to NBC rights
to use Expedition Recordings, on any other rights, which would be
greater than rights granted to Discovery herein, on which would
otherwise constitute or cause a breach of this Agreement.
D. Activities During the Expedition Period.
(i) During the Expedition Period, RMST shall, subject to the
terms and provisions of the IFREMER Charter Agreement,
cause the Nadir to work in tandem with the Ocean Voyager
and the Imaging Entities to pursue and obtain coverage of
scientific research on the Titanic shipwreck as
contemplated by the editorial treatment for the Programs as
determined by Producer (as defined below). The Vessels
shall be employed, to the extent possible (a) to recover
the "Big Piece," of the hull of the Titanic, the Marconi
Room transmitter; items from the new debris field
discovered in 1996; the "B" Deck door on the port side of
the bow debris field; coal; and additional artifacts as
time may permit; (b) to conduct the mosaic imaging and
imaging of the interior of the wreck via Robin and to
obtain such other footage as is required for the editorial
needs of the Programs; and (c) examination and studies of
Roy Cullimore and David Livingstone. The parties agree that
the primary goals of the Expedition are, and the Vessels
and personnel shall be first and foremost, employed to
achieve: (i) the Live Program; (ii) recovery of the "Big
Piece"; and (iii) creating the mosaic of the Titanic, as it
appears on the ocean floor. Without limiting the
-7-
<PAGE> 10
generality of the foregoing, the parties hereto further
agree that RMST shall use commercially reasonable efforts
to cause the Nautile and the other Vessels to operate in
accordance with the schedule set forth on Schedule 1(b)
attached hereto (the "Schedule"). The parties hereby
further agree that, if weather conditions during the
Expedition are such that the Vessels are unable to adhere
to the Schedule, the parties will discuss in good faith
adjustments thereto, but, weather permitting, during the
days of August 11-16, 1998, the Vessels shall be employed
solely to carry out Discovery's production needs for the
Live Program. After August 16, RMST may (if not already
achieved), pursue the raising of the "Big Piece", but shall
ensure that such activities interfere as little as possible
with the mosaic imaging activities or the Discovery
Production Activities.
E. Control of the Expedition. The Expedition shall be subject to the
terms, and controlled in the manner, as follows: RMST shall
charter the Vessels and other equipment identified in Section IIA
above, and shall be in charge of the deployment of such vessels
and equipment throughout the Expedition. Discovery shall have the
right to place its designated production crew on site for purposes
of filming, taping and otherwise recording all activities
associated with the Expedition (the "Discovery Production
Activities") and RMST agrees to accord Discovery and its
representatives with full rights of access with respect to the
Expedition to accommodate any such Discovery Production
Activities. RMST further agrees to cause the Equipment to be
utilized to satisfy the needs of Discovery Production Activities,
subject, however, to the utilization of the Vessels and/or
equipment: (a) to recover the "Big Piece," the Marconi Room
transmitter; items from the new debris field discovered in 1996;
the "B" Deck door on the port side of the bow debris field; coal;
and additional artifacts as time may permit; (b)to conduct the
mosaic imaging and imaging of the interior of the wreck via Robin
and to obtain such other footage as is required for the editorial
needs of the Programs; and (c) examination and studies of Roy
Cullimore and David Livingstone. The parties hereto further agree
that the filming or photographing of any part of the Expedition
undertaken by or on behalf of RMST will be done in a manner that
does not interfere in any way with the Discovery Production
Activities. In determining the purposes for which vessels and
equipment shall be utilized in the event that weather conditions
or equipment failures prevent the timely execution of dive plans,
George Tulloch shall confer with Discovery's designated
representative. Notwithstanding anything else to the contrary, it
is agreed that provision shall be made on the Vessels for the
continuous presence of eight (8) RMST representatives at the site
during the Expedition.
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<PAGE> 11
III. Financing the Expedition.
A. Budget. Discovery, individually, or together with other investors,
as determined by Discovery, in its sole discretion, shall provide
100% of the financing for the Expedition and the production of
documentary programming related thereto, pursuant to the
production and expedition budget dated of even date herewith (the
"Budget") in the maximum amount of $5,800,000, exclusive of
amounts expended by NBC in connection with the provision by NBC of
live production components of portions of the Expedition and
exclusive of amounts which are the responsibility of each party
hereto, as set forth below.
B. All Inclusive. The Budget is inclusive of all obligations of RMST
in respect of each of the Vessels in the amounts, and for the
services, set forth above. Discovery shall, and RMST hereby
authorizes and directs Discovery to, make direct payments out of
the Budget on behalf of RMST for the Vessels, pursuant to the
relevant agreement for each such Vessel. The Budget is also
inclusive of all other costs relating to the production,
completion and delivery of the Programs, as more specifically
discussed below. Notwithstanding the foregoing, (i) with respect
to expenses (such as telephone charges, other additional charges,
room and board) incurred by any individual while on a Vessel on
otherwise, the entity which retained such individual shall be
responsible for the expenses thereof; and (ii) the costs of any
and all elements of, or enhancements to, the Project not
anticipated and included in the Budget shall be borne solely by
the party requesting the same, absent the prior written consent of
the party or parties to be charged. Each party agrees that to the
extent costs associated with any line item exceed the amount
budgeted therefor in the Budget, including, without limitation,
any overage incurred with respect to the ship the Nadir (which
overage shall be the responsibility of RMST and IFREMER) such
increase shall be the responsibility of such party. Specifically,
and without limitation, with respect to telephone and room and
board charges aboard the Ocean Voyager or any other Vessel,
Discovery shall be obligated for such charges only to the extent
set forth above, and each of the parties hereto shall be
responsible for overages in respect thereof to the extent incurred
by or on behalf of individuals retained by such party.
IV. Exclusive Access Rights. Discovery acknowledges that, vis-a-vis RMST,
during the Expedition Period, it is obtaining all rights of access to the
Titanic wreck site, and all rights of exhibition and use of Expedition
Recordings, from RMST. If and to the extent that such rights with respect
to the Expedition on the Expedition Recordings are not granted to
Discovery by RMST herein, such rights, to the extent they are RMST's
rights, shall rest with RMST. In connection therewith, RMST hereby grants
to Discovery the exclusive rights of access to and coverage of the
Expedition for the
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<PAGE> 12
purposes of permitting Discovery to exercise the rights and licenses
granted thereto pursuant to this Agreement. Discovery may grant such
access and coverage rights to such entities and individuals as it deems
necessary or useful for the production and/or promotion of the Programs
and the Expedition and in connection with media for newsworthy purposes,
in accordance with the terms of, and subject to the consultation rights
of RMST set forth in, this Agreement. In order to effectuate and
facilitate the exercise of such exclusive rights by Discovery, the
parties hereto hereby agree as follows:
A. Corporate Sponsorships of Expedition. Neither Discovery nor RMST
shall grant corporate sponsorships for the Expedition. Such
limitation shall in no way limit on affect Discovery's rights to
sell on air and website advertising, on to otherwise sell or
promote the Programs, and such limitation shall in no way limit
RMST's right to sell advertising on its website, and to grant
corporate sponsorships of the Exhibitions.
B. Exclusive Access to Wreck Site. RMST hereby grants to Discovery
unlimited and exclusive access to the Titanic shipwreck and the
surrounding wreck site (collectively, the "Wreck Site") during the
Expedition Period, solely for the purposes of enabling Discovery
to exercise those rights and licenses granted to Discovery
pursuant to this Agreement. Specifically, and without limitation,
other than the Vessels and individuals directly involved in the
Expedition (i.e., RMST employees and agents, Discovery employees
and agents, Stardust employees, Image Entities employees and NBC
employees and agents), RMST shall not grant access rights to, on
otherwise authorize access of, cruise ships or other vessels,
entities or individuals, to the Wreck Site during Expedition
Period.
C. (i) Key Individuals Appearance Releases. RMST shall use its best
efforts to secure all requisite permissions and written releases
(by execution of an appearance/photo release in substantially the
form attached hereto as Schedule IV C(i) (an "Appearance/Photo
Release") of all "key individuals" brought to the Expedition
thereby; including, without limitation, RMST shall secure such
releases and the active cooperation of George Tulloch, and the
other seven individuals constituting employees or agents of RMST
brought to the Expedition thereby, with respect to the recording
of interviews and procurement of other materials for possible use
in and in connection with the Programs and any ancillary
productions relating to the Project undertaken by or with the
authorization of Discovery (e.g., "making of" programs, on-line
events, live television broadcasts, etc.) and the ownership and
use of photographic images taken thereby.
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(ii) Appearance/Photo Releases. Discovery and RMST shall each secure an
Appearance/Photo Release of all other individuals brought to the
site of the Expedition thereby (and with respect to RMST, whether
on the Nadir, the Ocean Voyager on any other Vessel, and each
Charter Agreement entered into by RMST shall provide that the
owner of such Vessel shall ensure that each such individual
including, without limitation, the individuals who "man" such
Vessels shall execute such form of Appearance/Photo Release prior
to boarding such Vessel.)
V. Media Coverage. RMST hereby acknowledges that is has always been, and
remains, a matter of critical importance to Discovery that suitable
approaches are found to anticipate and address the controversies
associated with a research and recovery operation involving the Titanic
shipwreck, both in the planning and execution of the Project and in all
press releases and other public announcements. RMST also acknowledges the
importance to Discovery of developing an effective means of managing
third party requests for media coverage of the Expedition so as to avoid
any dilution or impairment of the exclusive rights that Discovery is
being granted with respect to the Project. Discovery acknowledges RMST's
desires to preserve and promote the memory of Titanic with dignity and
respect, and with due regard to its maritime and historical significance.
Discovery also acknowledges the importance to RMST of promoting its work
as salvor-in-possession of the Titanic and its commitment to preserve the
memory of Titanic through the recovery, conservation and public
exhibition of the ship's artifacts, without sale to private collectors.
Accordingly, the parties hereto hereby agree as follows:
o RMST hereby grants to Discovery the right to review and approve
the content of all press releases and other public announcements
concerning the Project issued by or with the authorization of
RMST, which approval shall not be unreasonably withheld;
o exclusive of press releases issued by RMST in accordance with the
paragraph set forth above, the granting of access and permissions
to any person or entity (other than those engaged by any of the
parties hereto in connection with the Project; provided, that each
such individual shall have been apprised of the restrictions on
use set forth herein, and if required hereby, shall also have
executed a Photo Release and Appearance Release) seeking to record
or procure still photographs on film, video and/or other motion
picture images of the Expedition for use in print, television,
radio, on-line and any other media, irrespective of whether on not
the proposed use is for news, documentary on any other commercial
or non-commercial purpose (the "Media Requests") shall be the
decision of Discovery, subject to consultation with RMST regarding
the same. Discovery's foregoing approval rights shall include the
right to specify the terms and conditions of and to review and
approve the
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written agreement on which such Media Requests are to be
accommodated, if at all, and Discovery's approval may, at its
election, be conditioned on Discovery being accorded an
appropriate credit in conjunction with the permitted coverage.
RMST shall refer all Media Requests to Discovery. The parties
hereto shall work with one another in good faith to develop and
implement a process by which such Media Requests can be managed in
a manner that permits bona fide news coverage of the Expedition
while respecting and preserving the goals of the parties stated
above;
o the content of all press releases and other public announcements
concerning the Project issued by or with the authorization of
Discovery shall be subject to consultation with RMST regarding the
content of the same;
o Notwithstanding the foregoing, the parties hereto agree that media
coverage of the parties hereto which is not related to the
Expedition is not subject to such approval and consultation
process, provided that, in no event may RMST use or authorize the
use of the Discovery name on any mark thereof in any press release
or otherwise, without prior review of, and consent to, such use by
Discovery; and
o Discovery's right to handle Media Requests regarding the
Expedition shall, in addition to RMST's right to issue press
releases as set forth above, also be exclusive of RMST's right to
authorize publication of magazine articles about the Expedition,
subject to the provisions of Section VII G of this Agreement.
Discovery agrees to use reasonable efforts to refer all requests
for magazine articles regarding the Expedition to RMST.
Furthermore, RMST may deal exclusively with the media regarding
the arrival of the "Big Piece" and regarding its Exhibitions,
subject to consultation with Discovery regarding the content
thereof to the extent Discovery is intended to be referred to
therein.
VI. The Programs; Production of the Programs; Program Budget.
A. The Programs. It is anticipated that the Programs shall consist of
(i) a 2-hour live program of the Expedition (the "Live Program"),
(ii) a 2-hour science documentary about the Expedition and the
Titanic (the "Science Program"), and (iii) a one hour documentary
about the Expedition currently entitled "City at Sea."
B. Production of the Programs.
(i) The production and delivery of the Programs will be managed
by Discovery and the production company it selects and
engages in its sole discretion (Discovery and such
production company shall
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collectively be referred to as "Producer"). Discovery
presently intends to engage Stardust Visual, Inc.
("Stardust") as its production company for the Live Program
and the Science Program. Such engagement of Stardust shall
be pursuant to a production services agreement, in the form
customarily used by Discovery to engage third parties to
perform work-for-hire in connection with the production of
a program for Discovery, with such modifications to such
agreement as shall be agreed to by Discovery and Stardust.
Such agreement shall, without limitation, provide that
Stardust has no ownership interest in any Expedition
Recordings taken thereby, and that the same shall
constitute a work-for-hire. RMST hereby confirms and agrees
that neither it has control over, or rights in, the
Programs other than as specifically set forth herein.
Subject to the foregoing, Discovery shall in good faith
consult with RMST concerning the key creative elements and
production plan for the Programs.
C. Production Credits. The following production credits will be
accorded on the Programs: A credit in substantially the form
"Produced for Discovery Channel [by Stardust Visuals, Inc. (only
for the Live Program and the Science Program)] in association with
RMS Titanic, Inc." In addition, Discovery shall credit such other
individuals of RMST who participated in the Expedition as
reasonably requested by RMST.
VII. Ownership of Programs; Use of Programs.
A. Ownership of Programs. Except for the rights that shall be
retained by RMST or licensed by RMST to Discovery as set forth in
this Agreement, the parties hereto agree that Discovery shall be
the sole owner of the copyrights and all other rights in the
Programs and all elements thereof and relating thereto (the
"Program Elements") including, without limitation, concepts,
outlines, development materials, treatments, scripts, titles,
stills, original music, outtakes and performances (other than the
Expedition Recordings), all of which shall be created for
Discovery as a "work-made-for-hire" (as such ten is defined in the
U.S. Copyright Act).
B. Use of Programs and Program Elements. Except for the licenses and
other rights granted by Discovery to RMST as set forth in this
Agreement, Discovery will have the sole and exclusive right to
exhibit, license, promote, distribute, sell and otherwise use the
Programs and, to the extent provided herein, the Program Elements
and to exploit such rights therein in any and all manner in all
markets and in all media now in existence or to be developed
hereafter throughout the world in perpetuity without any
additional payment whatsoever to any individual on entity, as
provided herein. Without limitation,
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Discovery has exclusive, perpetual, worldwide Standard Television
Rights, Non-Standard Television Rights, and Theatrical and
Non-Theatrical Rights to the Programs and all Program Elements.
Such rights shall include, without limitation, the sole right to
sublicense the same, for the uses permitted hereunder, without
payment to RMST of any additional consideration, except as
specifically provided herein with respect to certain "back end"
rights. Notwithstanding the foregoing, Discovery hereby covenants
not to license or otherwise authorize a third party to exhibit the
Programs, or any portion thereof, for any display of Titanic
artifacts or other memorabilia other than at the RMST Exhibition
or in connection with the exploitation of Electronic Media Rights.
(i) Footage Rights in Program Elements. Discovery, in its sole
discretion, and for its own account, may make available to
third parties for licensing as stock footage any of the
Program Elements exclusive of those constituting Expedition
Recordings.
VIII. Ownership and Exploitation of Expedition Recordings. Discovery and RMST
hereby confirm and agree that RMST owns all rights in and to the
Expedition Recordings (other than NBC Recordings which do not contain a
Titanic Image) and that RMST shall retain the ownership of the
copyrights, therein, notwithstanding the license of Discovery of all or
any portion thereof pursuant to this Agreement.
A. License to Discovery for Programs, etc. RMST hereby grants to
Discovery the unlimited right and perpetual, fully paid license,
to incorporate the Expedition Recordings in the Programs, to
otherwise use and exploit all Expedition Recordings in and in
connection with the marketing, promotion, distribution, sale,
licensing and other exploitation of (i) the Programs (including,
without limitation, exploitation of the Programs in any manner in
all markets and in all media now or hereafter in existence), (ii)
of any Discovery Programming Service, and (iii) of any Permitted
Derivative Work, as such term is defined below, in any and all
media, whether now known on unknown, throughout the world in
perpetuity. RMST hereby further grants Discovery the right to
grant (i) NBC a sublicense of such rights, for use by NBC of the
Expedition Recordings pursuant to its agreement with Discovery to
include the same in NBC Programs and for news purposes, (ii) to
international distributors of a version of the Program a
sublicense of such rights, to permit each such distributer to
include Expedition Recordings in its version of a Program, and
(iii) a right to permit other third parties to use the Expedition
Recordings, for news purposes only, subject to such consultation
rights of RMST as are set forth above with respect to Media
Requests. Notwithstanding anything else to the contrary herein,
Expedition Recordings which are utilized by Discovery in a print
format for the marketing,
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distribution and promotion of the Programs must be approved by
RMST prior to such use, with RMST reserving the right to approve,
in its reasonable business judgment, the type and amount of
Expedition Recordings that Discovery will be permitted to use in a
print format for promotional purposes, in light of the potential
impact of Discovery's proposed use on the impairment of the
commercial value of the Expedition Recordings to RMST.
B. License for Permitted Derivative Works; Website. In addition to the
license set forth above, RMST hereby grants to Discovery the unlimited
right and perpetual, fully paid license, to incorporate the Expedition
Recordings in each of the following (collectively, "Permitted Derivative
Works"):
(i) in Other Productions; and
(ii) subject to the provisions set forth below, with respect to the use
of Stills constituting Expedition Recordings, to exhibit the same
on Discovery's website.
C. Intentionally Omitted.
D. Limited Uses by Parties. The parties hereto further agree as follows:
(i) Expedition Recordings; Footage Rights. RMST shall reserve the
non-exclusive right to exploit Footage Rights with respect to
Expedition Recordings not incorporated in the completed Programs
(i.e., RMST's reservation of non-exclusive Footage Rights applies
to out-takes only) which footage (x) contains a Titanic Image and
(y) does not constitute an NBC Recording; provided, that (A) such
Footage Rights shall not be exploited sooner than December 31,
1999, and (B) the maximum running time of any continuous sequence
of Expedition Recordings incorporated into a single production
shall be 120 seconds and the maximum aggregate running time of all
sequences of Expedition Recordings incorporated into a single
production shall not exceed 10 minutes per 60 minutes of running
time for the applicable production. All exploitation of Footage
Rights shall contain appropriate credits (Discovery, Stardust,
etc.) thereon. RMST shall have no right to use on exploit any NBC
Recording, whether on not the same constitutes an Expedition
Recording.
(ii) RMST Home Video; License to RMST for RMST Home Video. RMST shall
reserve the non-exclusive right to exploit Expedition Recordings
including those portions incorporated into the Programs but
exclusive of NBC Recordings, in respect of which RMST may make no
use to create an audio-visual work to be distributed to consumers
on video cassettes, for private
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viewing of the visual images and synchronized audio-track by means
of a playback device which causes a visual image of the work to
appear on the screen of a television receiver or comparable
device, where both the playback device and the television receiver
are located in consumer homes. Discovery hereby licenses to RMST
the non-exclusive right to combine portions of the Programs with
additional Wreck Site Recordings (the "RMST Home Video") and
exploit the Home Video Rights with respect to the resulting
production, on the following conditions:
(a) The maximum aggregate running time of all sequences of
the Programs incorporated into the RMST Home Video shall not
exceed 10 minutes per 60 minutes of running time for the
applicable production.
(b) RMST shall not commercially distribute, sell or
otherwise exploit the RMST Video (a) prior to June 30, 2000, and
(b) except via on-site retail sales to visitors at RMST Titanic
Exhibitions, and via direct marketing to the names on RMST's
proprietary mailing list, which currently consists of
approximately 150,000 such names.
(c) RMST shall not release or distribute an RMST Video
combining Expedition Recordings with or any portion of the
Programs prior to 30 days after Discovery shall release its home
video of the Live Program. RMST shall not release or distribute an
RMST Video combining additional Wreck Site Footage with Program
Elements prior to 30 days after Discovery shall release its first
home video with of a Program. To the extent available thereto,
Discovery shall provide RMST with reasonable notice of its
schedules for the release of the home video for each Program, and
shall provide to RMST, at no charge to RMST, a master copy of
each, within 15 business days of receipt by Discovery of the same.
Discovery shall use commercially reasonable efforts to cause to be
made for RMST, in beta format, a copy of the Wreck Site Recordings
taken by or on behalf of Discovery which have been recorded
thereby, and Discovery shall deliver to RMST, not later than 90
days after the end of the Expedition, a complete set of all of the
underwater master tapes of the Expedition.
(d) RMST shall consult with Discovery in good faith and
secure Discovery's prior approval with respect to (i) all
editorial content of the RMST Video, including any proposed
modifications to the editorial content of the Programs and all
Wreck Site Recordings and/or other content RMST proposes to
include on the RMST Video in addition to the Programs, (ii) the
use of any Discovery name, logo or
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other proprietary mark on or in connection with the RMST Video and
(iii) all packaging and marketing materials created for use in
connection with the distribution of the RMST Video.
(iii) Electronic Media Rights. RMST reserves the exclusive right to use
the Expedition Recordings other than the NBC Recordings in
connection with the exploitation of Electronic Media Rights to
create an interactive computer disc, provided that RMST hereby
covenants and agrees not to permit the sale or other distribution
of any such interactive computer disc, until the earlier of the
Premiere of the Science Show on April 30, 1999. Appropriate
credits shall be given to Discovery, Stardust, etc., with respect
to such Expedition Recordings so incorporated in such interactive
computer disc.
E. Publishing Rights. RMST shall retain the exclusive print publishing
rights with regard to Expedition Recordings other than the NBC Recordings
and Discovery acknowledges that it shall not have the right to authorize
publication of any book or magazine article concerning the Expedition,
provided that Discovery may publish, in its Discovery magazine, for
purposes of promoting a Program, an article regarding such Program and
the Expedition, such article limited in length to 5000 words, and further
provided that the same shall not extend to purely promotional pieces for
any Program, or press authorized pursuant to Discovery's right to deal
with Media Requests, and the right to market the Programs and Permitted
Derivative Works, in accordance with the terms of this Agreement. RMST
shall have no right to use Discovery trademarks in connection with any
publication authorized by RMST, without consent from, and agreement with,
Discovery, which would incorporate a fee structure.
F. RMST Use of Discovery Works. In no event shall RMST use or
authorize the use of any still or motion picture images or artwork
owned or controlled by Discovery without Discovery's express prior
written approval.
G. RMST Publication of Expedition Recordings. RMST shall not
authorize any publication of Expedition Recordings in National
Geographic Magazine or any affiliated publication, at any time
prior to the six month period following the premiere of the Live
Program, nor shall RMST authorize any publication of Expedition
Recordings in any other magazine or other periodical prior to the
premiere of the Live Program on Discovery Channel. In addition,
except as set forth in the previous sentence, RMST's rights to
authorize such use of Expedition Recordings is in all events
subject to the approval rights of Discovery set forth in Section 5
of this Agreement; provided, that the terms "magazine or other
periodical" referred in this sentence shall not be deemed to
include pamphlets, catalogues on other small printed handouts
distributed in
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connection with the promotion of the RMST on the RMST Titanic
Exhibitions.
H. Limitations on Use of Discovery's Still Images. In addition to the
foregoing, Discovery agrees that, with respect to stills of
Titanic artifacts recovered during the Expedition, and with
respect to stills of the raising of the hull of the Titanic,
(collectively, "Restricted Discovery Still Images"), Discovery
shall not use any such Restricted Discovery Still Images in
connection with the exercise of merchandising rights. Subject to
the terms of this Agreement regarding the use of Stills as set
forth below, Discovery hereby grants RMST, and RMST hereby grants
Discovery a non-exclusive license to exhibit any such Stills on
the Website thereof. Without limiting the foregoing, the parties
agree that the inclusion of a poster or other reproduction of a
Restricted Discovery Still Image within a home video distributed
by Discovery to consumers shall constitute merchandising of such
Restricted Still Image and shall be prohibited by this Agreement.
I. Holdback on Distribution of Hull Footage. Discovery and RMST
hereby covenant not to exhibit and distribute, or authorize the
exhibition or distribution of, via any media, any Recordings of
the hull of the Titanic taken during the Expedition, Prior to the
earlier of (x) the first airing of NBC's "Dateline" segment
covering the raising of the hull, and (y) the Live Program.
J. NBC Recording. RMST hereby covenants not to use or exploit, in any
manner, any NBC Recordings constituting Expedition Recordings.
IX. Discovery Home Video Exploitation.
A. Net Revenues Division. Discovery shall pay to RMST an amount equal
to ten percent (10%) of Net Revenues derived from Discovery's
exploitation of the Home Video Rights with respect to the Programs
and Discovery shall retain for its sole account all of the
remainder of such revenues derived from the exploitation of the
Home Video Rights with respect to the Programs. Discovery further
agrees to sell to RMST any Home Video of the Programs at
Discovery's cost, provided that the sale of such Home Videos by
RMST is restricted to on-site retail sales to visitors at RMST
Exhibitions.
X. On-Line Exploitation. Each of RMST and Discovery shall each have
nonexclusive On-Line Rights with respect to the Project and the
Expedition Recordings, in all languages throughout the world in
perpetuity; subject to the following:
(i) neither party shall permit the content of its website to be
maintained on any proprietary online service (i.e. within such service's
"firewall"), provided that either party
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may permit any such service to maintain a small portion of such content thereon,
solely for purposes of promoting and marketing the Programs, the content of such
parties own website relating to the Expedition, and for the purpose of directing
online traffic to such party's own website;
(ii) RMST shall consult with Discovery regarding the corporate sponsors
of its website, or those pages thereof relating to the Expedition, in an effort
to ensure that such sponsors are not in direct conflict with sponsors of the
Expedition or any of the Programs, provided that Discovery shall have no veto
right with respect to any such sponsor. Neither party shall commit to a sponsor
of its website that such party shall have the only website relating to the
Expedition (i.e. in any way covenant that they shall ensure that the other party
does not have content relating to the Expedition on its website.);
(iii) each party agrees to maintain a prominent hyperlink to the others
website on the start page of that portion of such party's website which relates
to the Expedition (i.e. not on the "Home" page, or on any index page, of such
party's website, but on the first page of such party's website which is
dedicated to the Expedition itself), and Discovery shall also maintain, on its
"link page" for Titanic websites, as the first hyperlink in the hyperlink list
on such page, a hyperlink to RMST's website;
(iv) exclusive of Stills constituting Expedition Recordings, each party
may convert for use on its website, at its own expense, such portions of the
Expedition Recordings as such selects, in its sole discretion, provided that
such "real time clips" shall each be limited in duration to approximately five
minutes, and each party shall further be limited to posting not more than three
new clips on such party's site each day, provided that, if less than three new
clips are posted on any one day, such party may "carry over" its right to post
such right to post such clips to any following day;
(y) with respect to Stills constituting Expedition Recordings, Discovery
shall obtain RMST's prior consent regarding the inclusion of the same on
Discovery's website, with RMST reserving the right to approve, in its reasonable
business judgment, the type and number of Stills constituting Expedition
Recordings that Discovery will be permitted to use on its website in light of
the potential impact of Discovery's proposed use on the impairment of the
commercial value of the Expedition Recordings to RMST. In the event that RMST
shall neither consent to nor prohibit such use within a reasonable time (in
light of the exigencies of the situation) after such consent is requested, such
consent of RMST shall be deemed to have been given.
(vi) Discovery may sublicense its On-Line Rights to NBC to promote the
NBC Programs.
XI. Promotional Reel. Discovery shall accord RMST access to all reasonably
available Program Elements (including out-takes, as well as the editorial
content of the completed Programs) for purposes of enabling RMST to
create a promotional reel for
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non-commercial internal use, and Discovery agrees that portions of such
promotional reel, in reasonably limited segments, may also be exhibited
at the RMST Titanic Exhibitions; provided, that RMST shall be solely
responsible for all costs of obtaining such elements (including all
required third party clearances) and Discovery shall have the right to
approve the content of any such reel, which approval shall not be
unreasonably withheld, to the extent such reel contains either Program
Elements or any mention of Discovery. RMST hereby grants Discovery a
right of first negotiation to produce such reel, in the event that RMST
intends to engage an outside producer to produce the same. Such right of
first negotiation shall be for a period of not less than 30 days,
commencing on the date RMST first notifies Discovery that it intends to
so cause the production of such reel. During such period RMST shall
negotiate exclusively and in good faith with Discovery. If Discovery and
RMST shall agree on terms in respect of such reel, and if RMST shall
thereafter fail to enter into an agreement with Discovery with respect
thereto, but shall instead reach agreement with a different media company
on the same or less favorable terms (for RMST) as those agreed to with
Discovery, RMST agrees that it shall permit Discovery the right to once
again negotiate (for a period of 10 days) to produce such reel on such
terms.
XII. Exhibition of Artifacts; Corporate Sponsorship of Exhibition. RMST shall
have complete control regarding exhibition of artifacts recovered from
the Wreck Site (the "Exhibition") and control of corporate sponsorships
affiliated therewith, provided that RMST shall discuss such corporate
sponsors with Discovery prior to making a commitment, to make an effort
to avoid a direct conflict with the corporate sponsors for the
Expedition, the airing of the Programs, or on the Discovery's website
covering the Expedition, but Discovery shall have no veto right with
respect thereto. RMST shall have the right to exhibit, solely at the
Exhibitions, all or any portion of the Programs. At Discovery's request,
for such period of time as determined by Discovery, in its sole
discretion, Discovery shall be a "name" sponsor of the Exhibition, for no
additional cost. Discovery shall notify RMST of its intention to be a
"name" sponsor within 30 days after Discovery receives written notice
from RMST of the venue and site of such Exhibition. In such event, RMST
shall use commercially reasonable efforts to ensure that the position and
size of Discovery's name and logo, as it appears at each Exhibition and
in all promotional materials (pamphlets, billboards, television
commercials, etc.) shall be larger and more prominent than that of any
other name sponsor. RMST shall have no right to use the Discovery name or
any other mark thereof at the Exhibition or otherwise, without the prior
written consent of Discovery. Such use, and fees payable to Discovery
therefore, shall be discussed by the parties as and when requested by
RMST. Notwithstanding the foregoing, RMST hereby represents and warrants
that it is a party to that certain agreement (the "CRE CO Agreement")
with CRE CO Finance Germany ("CRE CO"), and that the CRE CO Agreement
grants to CRE CO the right to exhibit RMST's artifacts in certain cities
in Germany, and may have an option to
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exhibit the same otherwise in the territory of Europe (each a "CRE CO
Exhibition"), such option which is renewable by CRE CO, subject only to
there being no default by CRE CO under the CRE CO Agreement. RMST further
represents that, under the CRE CO Agreement, RMST has only an approval
right, and not a right to require, corporate sponsors of any such CRE CO
Exhibition. In such connection, RMST hereby covenants and agrees (i) that
it shall not amend the CRE CO Agreement to expand CRE CO's rights
thereunder with respect to territory or length of, without Discovery's
prior written consent, (ii) RMST shall use its best efforts to cause CRE
CO not to permit as a corporate sponsor of a CRE CO Exhibition any media
company (for example, A&E Network, National Geographic, BBC), and (iii)
RMST shall notify Discovery when it learns of CRE CO's intention to hold
a CRE CO Exhibition, and if requested by Discovery, shall request of CRE
CO that Discovery be a "name" sponsor of such CRE CO Exhibition, for no
additional cost, in accordance with the terms set forth above.
XIII. Merchandising Rights. Subject to the terms and provisions of this
Agreement regarding the use of Still Images, each party shall have
non-exclusive merchandising rights, provided that RMST shall have
exclusive merchandising rights in "Expedition Apparel." In such
connection, Discovery agrees that it shall not grant a license to any
apparel company for, or otherwise cause the production of, apparel
bearing the logo created by, RMST for the Expedition, or apparel
containing the words "1998 Titanic Expedition" or words of similar
import, which apparel would be for sale to the public. Such restriction
shall not apply to the production of apparel for Discovery and Expedition
crew and personnel, to be worn thereby.
XIV. Rights in the Image. Other than the rights of Discovery to incorporate
the Image in Programs, Other Productions and Permitted Derivative Works,
and for the promotion and publicity of the same, and of Discovery
Services and of the Expedition, pursuant to the terms hereof, RMST shall
have all rights in the Image, provided that RMST acknowledges and agrees
to the granting to Woods Hole of certain rights in footage recorded using
equipment supplied by Woods Hole for the Expedition, as set forth in the
Woods Hole Agreement.
XV. First Negotiation Right. The parties agree that Discovery shall be
accorded a customary right of first negotiation to participate on the
next Titanic expedition following the Expedition (the "Next Expedition").
RMST shall give written notice to Discovery that it intends to commence
the Next Expedition, not later than 90 days prior to the projected date
thereof. Discovery's right of first negotiation shall be for a period of
not less than 45 days, commencing 10 business days after receipt of such
written notice (the "Discovery Negotiating Period). During the Discovery
Negotiating Period, RMST shall negotiate exclusively and in good faith
with Discovery. If Discovery and RMST shall agree on terms in respect of
such Next Expedition, and if RMST shall thereafter fail to enter into an
agreement with
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Discovery with respect thereto, but shall instead enter into an agreement
with a different media company on the same or less favorable terms (for
RMST) as those offered by Discovery, RMST agrees that it shall not have
the right to commence the Next Expedition earlier than one year following
the termination of the Discovery Negotiating Period.
XVI. Agents' Fees. RMST is solely responsible for and pay all fees,
commissions and expenses of its agents and representatives, none of which
shall be included in the Budget, it being understood that Discovery shall
have no obligation or liability whatsoever with respect to the same.
XVII. Representations and Warranties.
A. RMST hereby represents and warrants as follows:
(i) RMST is duly organized and validly existing under the laws
of the State of Florida. RMST has the full legal right to
enter into this Agreement, to grant all rights granted
herein and to fully perform its duties and obligations
hereunder. The person executing the Agreement on behalf of
RMST is fully empowered to so execute the Agreement.
(ii) RMST has not entered and shall not enter into any
arrangement or agreement which will or could conflict with
the rights granted to the other parties hereto.
(iii) RMST holds the exclusive salvage rights with respect to the
Titanic shipwreck.
(iv) RMST will use all reasonable efforts where appropriate
based on good faith commercial judgement, including seeking
injunctive relief where appropriate, to prevent any third
party from procuring footage or artifacts from the Titanic
wreck site during 1998.
(v) Other than as set forth on Schedule 17(a) attached hereto,
no claims have been made or are pending against RMST with
respect to its salvor-in-possession with respect to the
Titanic.
B. Discovery hereby represents and warrants as follows:
(i) It is duly organized and validly existing under the laws of
its jurisdiction of organization. It has the full legal
right to enter into this Agreement, to grant all rights
granted herein and to fully perform its
-22-
<PAGE> 25
duties and obligations hereunder. The person executing the
Agreement on behalf of it is fully empowered to so execute
the Agreement.
(ii) It has not entered and shall not enter into any arrangement
or agreement which will or could conflict with the rights
granted to the other parties hereto.
XVIII. Confidentiality. Except as may be required in connection with filings
with governmental agencies or courts or except as may be required under
applicable law, each party hereto shall keep strictly confidential and
shall not disclose to any other person or entity other than to its
officers and employees on a must-know basis, or to its respective lawyers
or accountants, the material terms and provisions of this Agreement. To
the extent that information with respect to this Agreement is revealed
pursuant to this Section, each party hereto shall use its best efforts to
ensure that each person or entity receiving such information shall
maintain it in confidence, subject to requirements applicable to RMST
that it files this Agreement with the United States Securities and
Exchange Commission pursuant to the requirements of the Securities
Exchange Act of 1934, as amended.
XIX. Indemnity. Each party (the "Indemnifying Party") shall at all times
indemnify and hold harmless the other parties, their respective
affiliates, licensees, assignees and affiliated companies, and the
officers, directors, shareholders, employees and agents of all such
entities (the "Indemnified Parties") against and from any and all claims,
damages, liabilities, costs and expenses (including, reasonable counsel
fees and disbursements) arising out of any breach or alleged breach by
the Indemnifying Party of any representation, warranty or other
provisions hereof. In the event of any claim or service of process upon
the Indemnified Parties involving the indemnification hereinbefore set
forth, the Indemnified Parties shall promptly notify the Indemnifying
Party of the claim. The Indemnifying Party shall promptly adjust, settle,
defend or otherwise dispose of such claim at its sole cost. In addition,
if they so elect, the Indemnified Parties shall have the right at their
sole cost to engage their own counsel in connection with such claim. In
the event that the Indemnified Parties determine that the Indemnifying
Party is not diligently and continuously defending any such claim, the
Indemnified Parties shall have the right, on their own behalf and as
attorney-in-fact for the Indemnifying Party, to adjust, settle, defend or
otherwise dispose of such claim. Any costs incurred by the Indemnified
Parties in connection therewith shall be promptly reimbursed by the
Indemnifying Party, and if the Indemnifying Party fails to so reimburse
the Indemnified Parties, the Indemnified Parties shall be entitled to
deduct such amounts from any other sums payable to the Indemnifying Party
under this Agreement.
XX. Notices. All notices, requests, consents, demands and other
communications hereunder shall be in writing delivered by any of the
following: personal delivery;
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<PAGE> 26
first class certified or registered mail, return receipt requested; U.S.
Express mail, or an express overnight service (such as Federal Express),
addressed to the respective parties to the Agreement at the addresses set
forth in the Agreement or to such other person or address as a party
hereto shall designate to the other parties hereto from time to time in
writing forwarded in like manner. Any notice, request, consent, demand or
other communication given in accordance with the provisions of this
Section shall be deemed to have been given and effective (a) if by
personal delivery or overnight mail, when actually received, and (b) if
by first class or certified mail, four business days after so mailed.
XXI. Relationship of Parties. Nothing contained in this Agreement shall create
any partnership or joint venture by and among the parties. None of the
parties hereto may pledge the credit of the other or make binding
commitments on the part of the other, except as otherwise specifically
agreed hereunder. This Agreement is not for the benefit of any third
party not a signatory hereto and shall not be deemed to give any right or
remedy to any such party whether referred to herein or not.
XXII. Default. Subject to the next sentence of this Section 22, if any party
hereto (the "Defaulting Party") defaults in the performance of any of its
material obligations hereunder and such default shall not be cured within
ten (10) days after written notice thereof to the Defaulting Party, or if
the Defaulting Party becomes insolvent, or if a petition under any
bankruptcy law shall be filed by or against the Defaulting Party which
petition, if filed against the Defaulting Party, shall not have been
dismissed within thirty (30) days thereafter, or if the Defaulting Party
executes an assignment for the benefit of creditors, or if a receiver is
appointed for the assets of the Defaulting Party, or if the Defaulting
Party takes advantage of any insolvency or any other like statute (any of
the above acts are hereinafter called an "Event of Default"), then the
non-defaulting parties may, in addition to any and all other rights which
it may have against the Defaulting Party, terminate this Agreement by
giving written notice to the Defaulting Party at any time after the
occurrence of an Event of Default. Notwithstanding the foregoing, if RMST
defaults in the performance of any of its material obligations hereunder
and such default is incapable of being cured, Discovery may, in addition
to any and all other rights which it may have against RMST, terminate
this Agreement by giving written notice to RMST, at any time after the
occurrence of such default. Furthermore, notwithstanding any termination
pursuant to this Section 22, the indemnities, warranties and
representations set forth herein shall remain in full force and effect,
and all rights granted to the non-defaulting parties shall remain vested
in such non-defaulting parties.
XXIII. Miscellaneous.
A. This Agreement contains the entire understanding and supersedes
all prior understandings between the parties hereto relating to
the subject matter herein
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<PAGE> 27
and this Agreement cannot be changed or terminated except in a writing
executed by the parties hereto. No employee, agent or other
representative of any party hereto is authorized to make any
representations, warranties or agreements except as specifically included
herein, and the other parties hereto acknowledge that they have not
entered into this Agreement in reliance upon any such representation,
warranty or agreement. This Agreement may not be assigned by the parties
hereto. Each party will, upon the other's request, promptly furnish to
the other copies of such agreements or other documents as the other may
reasonably desire in connection with any provisions of this Agreement.
B. Except as may be required in connection with filings with governmental
agencies or courts or except as may be required under applicable law,
each party shall keep strictly confidential and shall not disclose to any
other person or entity other than to its officers and employees on a
must-know basis, or to its respective lawyers and accountants, the
material terms and provisions of this Agreement. To the extent that
information with respect to this Agreement is revealed pursuant to this
subsection, each party shall use its best efforts to ensure that each
person or entity receiving such information shall maintain it in
confidence.
C. Unless otherwise stated herein, each of the parties hereto hereby agrees
that to the extent such party has approval rights with respect to any
matter, as set forth herein, such party shall exercise such rights in
good faith, subject to such standards as are set forth herein with
respect to any particular matter and to standards of reasonableness, such
approval rights which shall be exercised in a timely fashion, taking into
account the exigencies of the situation with respect thereto.
D. If any party hereto (the "Non-Performing Party") is prevented from or
materially hampered in performing its obligations hereunder by reason of
any present or future statute, law, ordinance, regulation, order,
judgement or decree, whether legislative, executive or judicial (whether
or not constitutional), act of God, earthquake, flood, fire, epidemic,
accident, explosion, casualty, lockout, boycott, strike, labor
controversy, riot, civil disturbance, war or armed conflict, act of
public enemy, embargo, or any similar event of force majeure (all of the
foregoing being deemed "force majeure"), such a failure to perform by
reason of such an event of force majeure shall not be deemed a breach of
or default under this Agreement and the parties shall be liable to each
other therefor. If there shall be any occurrence of any such event of
force majeure which continues in effect for a period of more than four
(4) consecutive or six (6) aggregate weeks, then the other parties shall
have the right by notice to the Non-Performing Party to
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<PAGE> 28
terminate this Agreement without further liability to the Non-Performing
Party, except for appropriate payment or adjustment in regard to payments
to be made hereunder.
E. This Agreement shall be construed and enforced in accordance with the
laws of the State of New York. The parties hereto hereby consent to and
submit to the jurisdiction of the federal and state courts located in the
State of New York, and any action or suit under this Agreement may be
brought in any federal or state court with appropriate jurisdiction over
the subject matter established or sitting in the State of New York. The
parties hereto shall not raise in connection therewith, and hereby
waives, any defenses based upon venue, the inconvenience of the forum,
the lack of personal jurisdiction, the sufficiency of service of process
(as long as notice of such action or suit is furnished in accordance with
Section 19 hereof) or the like in any such action or suit brought in the
State of New York.
F. In the event that any term, condition, covenant, agreement, requirement
or provision herein contained shall be held by any court to be
unenforceable, illegal, void or contrary to public policy, such term,
condition, covenant, agreement, requirement or provision shall be of no
effect whatsoever upon the binding force or effectiveness of any of the
other terms hereof, it being the intention and declaration of the parties
hereto that had they or any of them known of such unenforceability,
illegality, invalidity or contrariety to public policy, they would have
entered into a contract, each with the other, containing all of the other
terms, conditions, covenants, agreements, requirements and provisions
hereof.
G. No waiver by any of the parties hereto of any breach hereof shall be
deemed a waiver of any preceding or succeeding breach hereof.
Notwithstanding any other provision of this Agreement, except as set
forth in the following sentence, the sole remedy of RMST for breach by
Discovery of any of its obligations under this Agreement shall be an
action at law for damages and RMST acknowledges that such damages are
fully adequate to compensate such party in the case of any breach by
Discovery hereunder. In no event shall RMST be entitled to rescission,
injunctive or other equitable relief other than to enjoin Discovery from
using the Expedition Recordings and the Other Materials in contravention
of the terms and provisions of this Agreement.
H. RMST hereby acknowledge that the names and the marks "TDC". "Discovery
Channel", "TLC", "The Learning Channel", "Animal Planet" and any other
Discovery trademarks and any logos and variations incorporating the same
are, as among the parties hereto, the exclusive property of Discovery and
that RMST has not, nor will acquire any proprietary rights thereto by
reason of
-26-
<PAGE> 29
this Agreement. RMST shall not have any rights to use such names, logos,
variations or titles except at the times and in the manner expressly
approved by Discovery.
I. The headings of this Agreement or any sections hereof are inserted only
for the purpose of convenient reference, and it is acknowledged that they
may not accurately or adequately describe the contents of the sections
which they head. Such headings shall not be deemed to limit, cover, or in
any way affect the scope, meaning or intent of this Agreement or any part
thereof, nor shall they otherwise be given any legal effect in the
construction of any provision hereof.
J. This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the
same instrument.
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<PAGE> 30
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first set forth above.
DISCOVERY COMMUNICATIONS, INC.
By:
------------------------------------
Name:
Title:
RMS TITANIC, INC.
By: /s/ George Tulloch
------------------------------------
Name:
Title:
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<PAGE> 31
Schedule I
HOME VIDEO NET REVENUES
1. RMST shall be entitled to an amount equal to ten percent (10%) of
Discovery's "Net Revenues" (as defined below) from the exploitation of the Home
Video Rights in the Programs.
As used herein:
"Gross Revenues" shall mean all sums actually received by
Discovery from the exploitation of the Home Video Rights in the Programs by
Discovery, provided that:
(a) Gross Revenues shall be determined after all
refunds, credits, discounts, allowances and adjustments granted to any third
party licensees of Home Video Rights in the Programs; and
(b) Advance payments, whether returnable or not, shall
not be included in Gross Revenues until actually earned or applied by Discovery
from such exploitation.
In no event shall Gross Revenues include any receipts from
exploitation of derivative, subsidiary or ancillary rights of any kind or nature
(except as set forth to the contrary elsewhere herein), including, without
limitation, receipts from any spinoff, remake, sequel, non-theatrical
production, theatrical production, or other derivative use of the Programs or
any element thereof used in a home video.
"Net Revenues" shall mean Gross Revenues remaining after the
deduction therefrom on a continuing basis of the following in the order set
forth below:
(a) Any and all third party distribution fees and
expenses payable by Discovery in connection with the
exploitation of the Home Video Rights;
(b) Discovery's "Distribution Fee" of 30% where
Discovery does not use a subdistributor, and of 10%
where Discovery does use a subdistributor, in each
case computed on 100% of Gross Revenues;
(c) Discovery's "Distribution Expenses" as set forth
below; and
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<PAGE> 32
(d) Discovery's "Special Production Expenses" as set
forth below.
Discovery's "Distribution Expenses" shall include, without
limitation, (i) costs of goods computed on a per-unit basis (including, without
limitation, dubbing, packaging and shipping, insurance and other fulfillment
costs), (ii) actual bad debts, (iii) any sales, excise, use and value-added
taxes, (iv) actual returns, (v) a reserve for bad debts applicable to (ii) above
not to exceed 2% of gross billings and a reserve for Returns (defined below)
applicable to (iv) above not to exceed 6% of gross billings, said reserves to be
adjusted and liquidated at the end of the first six months following the initial
release of such Home Video, and quarterly thereafter with each subsequent
accounting period; and (vi) costs of promotion (third party payments only)
directly related to sales of the home videos of the Programs. Revenues and
expenses from the exploitation of the Home Video Rights in the Programs via each
channel of distribution shall be cross-collateralized against revenues and
expenses from the exploitation of the Home Video Rights in the Program via each
other channel of distribution.
Discovery's "Special Production Expenses" shall mean all direct,
out of pocket costs and expenses incurred directly in connection with the
creation of alternative versions of the Programs in connection with the
exploitation of the Home Video Rights therein.
"Returns" shall mean copies of the Program in a Home Video format
returned to the distributor thereof by customers pursuant to such distributor's
normal return policy of accepting returns for any reason at any time.
2. Discovery shall render to RMST periodic statements showing, in summary
form, the calculation of all Net Revenues pursuant to this Agreement, which
shall be accompanied by RMST's share thereof, if any. Statements shall be
rendered on a semi- annual basis, within sixty (60) days after the end of second
quarter after the initial distribution by Discovery of a home video of a
Program, provided, however, that no statements need be rendered for any
accounting period in which no Gross Revenues are received by Discovery. Should
Discovery make any overpayment to RMST hereunder for any reason, Discovery shall
have the right to deduct the amount of such overpayment from any further monies
owing to RMST hereunder, or may demand repayment from RMST, in which event RMST
shall promptly repay the same to Discovery.
3. RMST may, at its own expense, but not more than once each year, audit
Discovery's records relating to the Programs at the offices of Discovery for the
purpose of verifying the payments made to RMST hereunder. Any such audit shall
be conducted only by a certified public accountant (subject to Discovery's
reasonable approval) during normal business hours upon reasonable prior written
notice and shall not continue for more than thirty (30) consecutive days. RMST
shall not have the right to examine, inquire into or object to any matter
contained in any statement after the expiration of twelve (12) months from the
date of
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<PAGE> 33
mailing of the statement. RMST's right to examine Discovery's records shall be
limited to those relating specifically to the exploitation of Home Video Rights
in the Programs by Discovery, and under no circumstances shall RMST have the
right to examine records relating to Discovery's business generally or to any
other programs for the purpose of comparison or otherwise. In the event that an
audit by RMST discloses an underpayment of more than five percent (5%) to RMST
and of more than $5,000, and such underpayment is not the subject of a good
faith dispute, Discovery shall reimburse Producer for the reasonable costs of
such audit.
4. Discovery shall not be considered a trustee, pledgeholder, fiduciary
or agent of RMST by reason of anything done or any money collected by it, and
shall not be obligated to segregate receipts from Discovery's exploitation of
Home Video Rights in the Programs from its other funds. RMST shall not have any
lien or other rights in or to the Gross or Net Revenues so derived by Discovery,
it being understood that the references thereto are intended solely for the
purpose of determining the amount of monies payable to RMST hereunder, if any.
Discovery shall have the complete authority to license, market and exploit the
Home Video Rights, or to refrain from so doing, as it may choose in its sole
discretion, and RMST acknowledges that Discovery is not in any way making any
representations or guarantees of any kind whatsoever regarding the amount of Net
Revenues which may be received from the exploitation of such Home Video Rights.
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<PAGE> 34
Schedule 1(b)
Dive Schedule Summary
<TABLE>
<CAPTION>
Nautlie ROV's
<S> <C> <C> <C>
August 3 Rig The Piece Bow
4 Rig The Piece Bow
5 Rig The Piece Bow
6 Rig The Piece Bow
7 Mosaic (Stern) provided The Piece is completely rigged Stern
8 Raise The Piece Stern
9 George or PH scouts/preps Marconi (Bow) Stern
10 NBC Correspondent at Bow Stern
11 Garzke at Stern Bow
12 Practice Day 1 (Bow) Practice Day 1 (Stern)
13 Practice Day 2/ Blocking Day 1 (Bow) Practice Day 2 / Blocking Day 1 (Stern)
14 Practice Day 3/ Blocking Day 2 (Bow) Practice Day 3 / Blocking Day 2 (Stern)
15 Practice Day 4/ Dress Rehearsal (Bow) Practice Day 4 / Dress Rehearsal (Stern)
16 Live Broadcast (Bow) Live Broadcast (Stern)
17 Travel to St. John's Travel to St. John's
18 Travel to St. John's Travel to St. John's
19 Travel Back To Titanic Travel Back To Titanic
20 Travel Back To Titanic Travel Back To Titanic
21 Mosaic (Stern) Bow (Unless de-mob takes longer than 24 hrs)
22 Mosaic (Stern) Bow
23 Mosaic (Stern) Bow
24 Mosaic (Bow) Stern
25 Mosaic (Bow) Stern
26 Mosaic (Bow) Stern
27 Mosaic (Debris Field) Trying to stay 800 meters away from wherever Nautile is
28 Mosaic (Debris Field) Trying to stay 800 meters away from wherever Nautile is
29 Mosaic (Debris Field) Trying to stay 800 meters away from wherever Nautile is
30 Mosaic (Debris Field) Trying to stay 800 meters away from wherever Nautile is
31 Mosaic (Debris Field) Trying to stay 800 meters away from wherever Nautile is
September 1 Mosaic (Debris Field) Trying to stay 800 meters away from wherever Nautile is
Note: Retrieval of artifacts and coal will take place throughout the entire expedition by both Nautile and the ROV's.
</TABLE>
<PAGE> 35
Schedule IV C (i)
GENERAL RELEASE AND WAIVER
OF RIGHTS AGREEMENT
NOTICE: YOUR PRESENCE ABOARD THE "NADIR" AND "OCEAN
VOYAGER" SURFACE VESSELS AND ANY OTHER VESSEL
CHARTERED FOR THE 1998 EXPEDITION
OF RMS TITANIC, INC. TO THE SITE OF
THE SINKING OF THE R.M.S. TITANIC, AND
TRAVEL ON SUCH VESSELS TO AND FROM
LAND, IS AN INHERENTLY DANGEROUS AND HAZARDOUS
ACTIVITY. PRESENCE ABOARD SUCH VESSELS
IS AT YOUR OWN RISK.
I wish to be permitted aboard vessels that may be present at, or utilized
in connection with, the expedition by R.M.S. Titanic, Inc. (the "RMST"),
together with the participation of Discovery Communications, Inc. ("DCI") and
National Broadcasting Company ("NBC") on or about August 1998, to the site of
the sinking of the R.M.S. Titanic in the North Atlantic Ocean (the
"Expedition"). I acknowledge that RMST has chartered vessels owned by IFREMER
and ___________________ for such Expedition. Subject to the terms and conditions
set forth below, I understand that I may be permitted to be aboard the IFREMER
"NADIR" vessel, or the _____________ "OCEAN VOYAGER" vessel, or the Abeille"
vessel as the case may be, during the course of the Expedition. For convenience
of reference, the IFREMER "NADIR", "OCEAN VOYAGER" and Abeille vessels are
collectively referred to herein as the "Vessels".
I understand that presence upon the Vessels is an inherently dangerous
and hazardous activity.
In consideration of the company permitting me to be aboard the Vessels, I
agree as follows:
GENERAL RELEASE
1. I hereby agree to assume all risks with respect to, and agree to
release and hold each of RMST, DCI, NBC and IFREMER (RMST, DCI, NBC and IFREMER
shall be collectively referred to herein as the "Companies") and their
respective officers, directors, employees and agents harmless from any and all
liabilities, claims, demands, causes of action, damages, costs, expenses and
obligations of any nature whatsoever for any personal injury, disease or
sickness, including death resulting therefrom, or for loss of, or damage to, my
property, while boarding, aboard or departing from the Vessels. I hereby agree
not to make any claim against and/or sue
<PAGE> 36
GENERAL RELEASE AND WAIVER
OF RIGHTS AGREEMENT
NOTICE: YOUR PRESENCE ABOARD THE "NADIR" AND "OCEAN
VOYAGER" SURFACE VESSELS AND ANY OTHER VESSEL
CHARTERED FOR THE 1998 EXPEDITION
OF RMS TITANIC, INC. TO THE SITE OF
THE SINKING OF THE R.M.S. TITANIC, AND
TRAVEL ON SUCH VESSELS TO AND FROM
LAND, IS AN INHERENTLY DANGEROUS AND HAZARDOUS
ACTIVITY. PRESENCE ABOARD SUCH VESSELS
IS AT YOUR OWN RISK.
I wish to be permitted aboard vessels that may be present at, or utilized
in connection with, the expedition by R.M.S. Titanic, Inc. (the "RMST"),
together with the participation of Discovery Communications, Inc. ("DCI") and
National Broadcasting Company ("NBC") on or about August 1998, to the site of
the sinking of the R.M.S. Titanic in the North Atlantic Ocean (the
"Expedition"). I acknowledge that RMST has chartered vessels owned by IFREMER
and __________________ for such Expedition. Subject to the terms and conditions
set forth below, I understand that I may be permitted to be aboard the IFREMER
"NADIR" vessel, or the _________________ "OCEAN VOYAGER" vessel, or the Abeille"
vessel as the case may be, during the course of the Expedition. For convenience
of reference, the IFREMER "NADIR", "OCEAN VOYAGER" and Abeille vessels are
collectively referred to herein as the "Vessels".
I understand that presence upon the Vessels is an inherently dangerous
and hazardous activity.
In consideration of the company permitting me to be aboard the Vessels, I
agree as follows:
GENERAL RELEASE
1. I hereby agree to assume all risks with respect to, and agree to
release and hold each of RMST, DCI, NBC and IFREMER (RMST, DCI, NBC and IFREMER
shall be collectively referred to herein as the "Companies") and their
respective officers, directors, employees and agents harmless from any and all
liabilities, claims, demands, causes of action, damages, costs, expenses and
obligations of any nature whatsoever for any personal injury, disease or
sickness, including death resulting therefrom, or for loss of, or damage to, my
property, while boarding, aboard or departing from the Vessels. I hereby agree
not to make any claim against and/or sue
<PAGE> 37
any of the Companies or their respective officers, directors, employees and
agents for any such injury, disease, sickness, death, loss or damage.
2. I hereby release each of the Companies and their respective officers,
directors, employees and agents from any claims, demands, causes of action,
damages, costs, expenses and obligations of any nature whatsoever for any
injuries or losses arising out of the negligence of any of the Companies or
their respective officers, directors, employees or agents.
3. I hereby acknowledge that the commanding officer of the respective
Vessels has sole and exclusive control over the standards of care and conduct to
be followed by all persons aboard the Vessels, and agree to abide by all
directives and instructions, and rules and regulations, that may be issued by
the crew, agents, staff, and/or employees of the respective Vessels.
4. I hereby agree that I shall be solely responsible for all costs and
expenses in connection with my travel to and from the Vessels and agree that
none of the Companies had undertaken or has any responsibility or obligation to
make any arrangements for my travel to and from the Vessels. I further
acknowledge that I have not paid any fees or any other form of compensation to
any of the Companies in consideration of my having been granted permission to be
aboard the Vessels.
OWNERSHIP OF PHOTOGRAPHIC
AUDIO, VIDEO AND FILM RIGHTS
5. I hereby agree that RMST, DCI or NBC, as the case may be
(collectively, the "Owners"), shall be the sole and exclusive owner of any and
all audio or visual records made on any medium, including, but not limited to,
photographs (including negatives), audio recordings, video recordings, film and
motion pictures (collectively "Artwork") that I may take or make of the Vessels
or while boarding, aboard or departing from the Vessels. I hereby agree to
surrender and deliver to the Owners any and all such audio and visual records
upon request of any of the Owners while I am aboard the Vessels, or any time
after I depart from the Vessels, and further agree that I shall not be entitled
to receive payment of any fees, compensation, royalties or any other
remuneration of any kind or description from any of the Owners or from any third
party for the rights to any such audio or visual records. I further agree not to
release any Artwork to any news, media or other commercial enterprise, but
shall, to the extent I retain the same pursuant hereto, use such Artwork only
for my personal use.
6. I hereby agree that the Owners shall have the right to copyright such
audio or visual records in their respective names or any name they may choose,
and to
2
<PAGE> 38
edit, use, re-use, publish, re-publish, the same, in whole or in part, severally
or in conjunction with other audio or visual works, in any medium and for any
purpose whatsoever including (but not by way of limitation) illustrating,
promotion and advertising, and trade, with or without credit or attribution to
me, as the Owners, in their sole discretion, shall deem appropriate.
7. The Owners may, but shall not be obligated to, deliver to me copies of
any such audio or video record for my personal enjoyment and use, subject to
execution by me of an appropriate agreement prohibiting me from the use of any
such audio or video records for commercial purposes or for my direct or indirect
pecuniary gain, and subject further to such other terms and conditions as the
Owners, in their sole discretion, may deem reasonable.
PHOTOGRAPHS AND
LIKENESS OF ME
8. I hereby agree that the Owners shall have an unrestricted, absolute
and irrevocable right, with respect to photographs and likenesses of me, or my
voice or appearance in any other visual or audio records of the Expedition,
including, but not limited to, photographs, video recording, film, taping and
motion pictures: (a) to copyright the same in the Owner's respective name or any
other name they may choose; (b) to edit, use, re-use, publish and re-publish the
same in whole or in part, severally or in conjunction with other such visual
records, in any medium and for any purpose whatsoever, including (but not by way
of limitation) illustration, promotion and advertising, and trade; and (c) to
use my name in connection therewith if the Owners so choose. I further hereby
release and discharge the Owners, their respective officers, directors,
employees and agents from any and all claims or demands of any kind whatsoever
arising from, or in connection with the use of such visual records, including
any and all rights to compensation, royalties or other remuneration or any claim
for libel.
CONFIDENTIALITY AND
NON-DISCLOSURE AGREEMENT
9. I hereby agree that any and all information obtained by me concerning
the Expedition or while boarding, aboard or departing from the Vessels, is
confidential and the proprietary information of the Companies and is the sole
and exclusive property of the respective Companies. I agree that I shall not
divulge, disclose, distribute, publish, disseminate, record, duplicate or
replicate any such information, and further agree that by the disclosure of such
confidential and proprietary information to me, the respective Companies do not
grant any express or implied right for me to use such information for any
purpose.
3
<PAGE> 39
10. I agree that I will not participate in any news conference, interview
or otherwise disclose any information concerning the Expedition or the Vessels,
without the prior consent of the Companies.
11. I hereby agree that monetary damages may not be a sufficient remedy
for my unauthorized disclosure of the Companies' proprietary and confidential
information and further agree that the respective Companies shall be entitled,
without waiving any other rights or remedies, to such injunctive or equitable
relief as may be deemed proper by a court of competent jurisdiction.
MISCELLANEOUS
12. Miscellaneous.
(a) Waiver.
No purported waiver by either party of any default by the other party
with respect to any term or provision contained herein shall be deemed to be a
waiver of such term or provision unless the waiver is in writing and signed by
the waiving party. The waiver by either party hereto of any breach or violation
of any provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach or violation.
(b) Entire Agreement.
This Agreement sets forth the entire understanding between the parties
concerning the subject matter hereof, and supersedes all prior negotiations and
understandings with respect thereto. There are no covenants, promises,
agreements, conditions or understandings, either oral or written, between the
parties and relating to the subject matter of this Agreement other than those
set forth herein. No alteration, amendment, change or addition to this Agreement
shall be binding upon either party unless in writing and signed by the party to
be charged.
(c) Governing Law.
This Agreement shall be construed in accordance with and be governed by
the laws of the State of New York, without recourse to its conflict of laws
principles. Jurisdiction and venue for any suit or proceeding brought with
regard to this Agreement shall be either in the Supreme Court of the State of
New York or the United States District Court for the Southern District of New
York.
4
<PAGE> 40
(d) Indemnity.
I agree to indemnify the Companies against any and all liability,
damages, costs or expenses (including reasonable attorneys' fees) arising from
any claims, demands or actions of libel, violation of the right of privacy,
infringement of copyright or other rights arising out of my breach of this
Agreement. I shall at my own cost and expense dispose of any such claim or
demand, or defend against any such action. The respective Companies shall have
the right, at my cost and expense, to participate in the defense of any such
action, and to be represented by counsel of the respective Companies' selection.
(e) Benefit.
This agreement shall be binding upon my estate, heirs, executors,
administrators, successors and assigns.
(f) Severability.
If any provision of this Agreement shall be held invalid or
unenforceable, the remainder of this Agreement which can be given effect without
such invalid or unenforceable provision shall remain in full force and effect,
and the court or agency having competent jurisdiction over the parties and the
subject matter shall be empowered to revise and/or construe said provisions of
the agreement so as to accomplish the intention of the parties within the bounds
of permissible legal limits. If any provision is held invalid or unenforceable
with respect to particular circumstances, it shall remain in full force and
effect in all other circumstances.
(g) Captions.
The captions and section numbers appearing in this Agreement are inserted
only as a matter of convenience, and shall not be used to construe, define,
limit or describe the scope or intent of the provisions of this Agreement.
Dated: July __, 1998
___________________________________________
Signature of ______________________________
(Print Name)
5
<PAGE> 41
SCHEDULE 17(a)
The only outstanding claim made or pending against RMST relating to its
exclusive salvage rights to the Titanic shipwreck is an appeal to the United
States Court of Appeals for the Fourth Circuit from an order entered June 23,
1998 (the "Order") granting RMST's motion for a preliminary injunction enjoining
certain parties from visiting the wreck site to view and photograph the wreck
(R.M.S. Titanic. Inc. v. The Wrecked and Abandoned Vessel believed to be the RMS
TITANIC. in rem, No. 2:93cv902), with respect to which there is presently
pending a motion for a stay of the Order pending determination of such appeal.
<PAGE> 42
[LOGO] [email protected]
07/09/98 11:30 AM
To: Jessica Algazi
cc: [email protected]
Subject: RMST Rights for WHOI
- --------------------------------------------------------------------------------
Hi, Jessica.
Here is what we all hope will be the final draft of the rights provisions
affecting WHOI's use of footage from the Titanic shoot. Please note the
following small changes:
1. WHOI will provide personnel for maintenance of its equipment, but not
operation. Apparently I was misinformed. Nevertheless, I believe the Meridien
people are aware of the responsibilities in this regard.
2. Please see the small addition to para. 4, which I believe clarifies the
intention of the suggestion made by RMST. Institutionally,
3. Some minor revisions of a purely editorial nature, primarily with respect to
stills.
Please let me know if there is anything further you need. I'll look forward to
seeing the draft agreement.
Mary Ann
- --------------------------------------------------------------------------------
Woods Hole Oceanographic Institution ("WHOI") shall provide underwater camera
and lighting equipment, installation and telemetry services and personnel to
maintain such equipment to DCI on an independent contractor basis in connection
with a television program ("Program"):
1. WHOI shall have no right, title or interest in the copyright in the footage
transmitted or recorded by WHOI cameras and equipment ("Footage") or any portion
thereof.
2. All WHOI personnel shall execute such Appearance Releases and Photography
Releases. DCI shall use its best efforts to insure that no WHOI employee or
contractor shall be recognizable in any salvage efforts that may occur or that
may be depicted in the Program or any program utilizing the Footage.
3. DCI shall grant or shall cause RMST to grant to WHOI a perpetual,
non-exclusive license in the Footage as follows for:
(a) Scientific/technological research: Internally at WHOI without
limitation;
(b) WHOI educational exhibitions: Up to 2-1/2 minutes of excerpts of
Footage selected by WHOI from all Footage and up to 12 stills prepared the
excerpts of Footage for use in connection with WHOI or "Destination Deep Sea"
educational exhibition (for which WHOI shall not charge admission) at WHOI or
science museums or similar venues: provided, however, that WHOI's use of such
excerpts shall be limited to that portion of the exhibition concerning ship
wrecks and shall not commence prior to 6/99 and that WHOI may not exhibit such
excerpts in any market where RMST has an exhibition, either during such RMST
exhibition or for one month prior to such RMST exhibition; and provided,
further, that the
<PAGE> 43
parties, by mutual agreement, may elect to use a different procedure for
selection of excerpts for use in WHOI educational exhibitions; and provided,
further, that WHOI will not use or refer to the excerpts or stills in
promotional materials for the exhibition;
(c) WHOI-sponsored educational materials: Up to 12 stills prepared from
Footage and up to 5 minutes of excerpts of Footage for use in WHOI-sponsored
educational materials (published by a publisher of text books) for K-12
curricula; provided, however, that the stills and Footage shall not be included
in books or other media that are sold or distributed for non-classroom use;
(d) Scientific/technical journals: Up to 12 stills prepared from Footage
for use in articles (but not to be used as a magazine cover or in pictorial
feature) in "peer-review" scientific/technical journals, but excluding
mass-market journals such as Scientific American and National Geographic;
provided, however, that no such article shall be published prior to the date
three months following completion of the expedition.
(e) Director's presentations: Up to 2 minutes of excerpts from Footage in
use in presentations (for which there is no admission charge)given by the
Director or employees of WHOI for the scientific and educational purposes of the
institution; provided, however, that no Footage shall be used in any
presentations in which Titanic is the subject matter;
(f) Promotion: Up to 2 minutes of excerpts from Footage licensed pursuant to
subparagraphs 3(b), (c), (d) and (e) for use in promotion relative to the
foregoing activities; provided, however, that such excerpts shall be the same as
those distributed publicly by RMST and DCI in their respective promotional uses.
4. WHOI shall not in any way disparage or denigrate the salvage efforts,
expeditions, exhibitions and/or other activities of RMST or its directors,
officers, employees, agents or licensees In connection with work contracted for
under this agreement including but not limited to its use of footage hereunder.
5. WHOI will accord DCI and RMST credit in connection with any uses of Footage
pursuant to subparagraphs 3 (b) through (e).
The concepts contained in this
letter are hereby agreed to and
accepted.
RMS TITANIC, INC.
By: /s/ George Tulloch
-----------------------------
George Tulloch
<PAGE> 1
Issued by
The Documentary Committee of
The Baltic and International Maritime Council (BIMCO), Copenhagen
(First Edition published 1976)
REVISED [ILLEGIBLE]
Adopted by
International Support Vessel Owners'
Association (ISOA), London
Copyright, published by
The Baltic and International Maritime Council
(BIMCO), Copenhagen
September 1959
UNIFORM CHARTER PARTY FOR OFFSHORE SERVICE VESSELS [LOGO]
CODE NAME: "SUPPLY TIME 89" PART I
- --------------------------------------------------------------------------------
1. Place and date
- --------------------------------------------------------------------------------
2. Owners/Place of business (full style, address and telex/telefax no.)
(Cl.1(a))
AQUA PLUS
14, rue Daguerre
BP 533
97500 SAINT PIERRE ET MIQUELON
- --------------------------------------------------------------------------------
3. Charterers/Place of business (full style, address and telex/telefax no.)
(Cl.1(a))
RMS TITANIC, INC.
17, Battery Place, Suite 203
New York, N.Y. 10004
U.S.A.
Phone: (212) 558 6300
Fax: (212) 482 1912
- --------------------------------------------------------------------------------
4. Vessel's name (Cl.1(a))
"OCEAN VOYAGER"
- --------------------------------------------------------------------------------
5. Date of delivery (Cl.2(a))
July 24th, 1998
- --------------------------------------------------------------------------------
6. Cancelling date (Cl.2(a) and (c)
July 31st, 1998
- --------------------------------------------------------------------------------
7. Port or place of delivery (Cl.2(a))
BOSTON
- --------------------------------------------------------------------------------
8. Port or place of redelivery/notice of redelivery (Cl.2(d))
(i) Port or place of redelivery
BOSTON
-------------------------------------------------------------------------
(ii) Number of days' notice of redelivery
2 (two) days
- --------------------------------------------------------------------------------
9. Period of hire (Cl.1(a))
Total hire 44 (forty four) days firm: BOSTON/BOSTON
- --------------------------------------------------------------------------------
10. Extension of period of hire (optional) (Cl.1(b))
applicable
- --------------------------------------------------------------------------------
(i) Period of extension
-------------------------------------------------------------------------
(ii) Advance notice for declaration of options (days)
5 (five) days in advance
- --------------------------------------------------------------------------------
11. Automatic extension period to complete voyage or well (Cl.1(c))
(i) Voyage or well (state which)
not applicable
-------------------------------------------------------------------------
(ii) Maximum extension period (state number of days)
not applicable
- --------------------------------------------------------------------------------
12. Mobilisation charge (lump sum and when due) (Cl.2(b)(i))
(i) Lump sum
nil
-------------------------------------------------------------------------
(ii) When due
n/a
- --------------------------------------------------------------------------------
13. Port or place of mobilisation (Cl.2(b)(i))
BOSTON
- --------------------------------------------------------------------------------
14. Early termination of charter (state amount of hire payable) (Cl.25(a))
Full lumpsum 44 (forty four) days payable
- --------------------------------------------------------------------------------
15. Number of days' notice of early termination (Cl.25(a))
2 (two) days
- --------------------------------------------------------------------------------
16. Demobilisation charge (lump sum) (Cl.2(e) and Cl.26(a))
included
- --------------------------------------------------------------------------------
17. Area of operation (Cl.5(a))
"TITANIC" wreck site - North Atlantic
- --------------------------------------------------------------------------------
18. Employment of vessel restricted to (state nature of services(s))
(Cl.5(a))
Support diving operations of RMS TITANIC to promote the survey of the
wreck
- --------------------------------------------------------------------------------
This document is a computer generated SUPPLYTIME 89 form printed by authority of
The Baltic and International Maritime Council (BIMCO), using software which is
copyright of Strategic Software Ltd. (SSL). Any insertion or deletion to the
form must be clearly visible. In the event of any modifications made to the
preprinted text of this document, and which is not clearly visible, then the
original BIMCO approved shall apply. BIMCO and SSL, assume no responsibility
for any loss or damage caused as a result of discrepancies between the
original BIMCO approved document and this document.
<PAGE> 2
PART I
(Continued) "SUPPLYTIME 89" Uniform Charter Party for Offshore Service Vessels
- --------------------------------------------------------------------------------
19. Charter hire (state rate and currency) (Cl.10(a) and (d))
BOSTON/TITANIC site/BOSTON
See Additional Clause 39
- --------------------------------------------------------------------------------
20. Extension hire (if agreed, state rate) (Cl.10(b))
If Vessel stays on site later than 5th of September 15:00, a rate of US$
13,000 (thirteen thousand United States dollars) per day prorata will
apply.
- --------------------------------------------------------------------------------
21. Invoicing for hire and other payments (Cl.10(d))
(i) state whether to be issued in advance or arrears
30 (thirty) days in advance
--------------------------------------------------------------------------
(ii) state to whom to be issued if addressee other than stated in Box 2
As per Box 2
--------------------------------------------------------------------------
(iii) state to whom to be issued if addressee other than stated in Box 3
As per Box 3
- --------------------------------------------------------------------------------
22. Payments (state mode and place of payment; also state beneficiary and
bank account) (Cl.10(e))
Owners' bank account
SA AQUA +
SOCIETE GENERALE
Paris Rive Gauche Ent
Code Banque: 30003
Code Guichet: 03640
Account number 03020011619
Cle RIB 37
See Additional Clause 33
- --------------------------------------------------------------------------------
23. Payment of hire, bunker invoices and disbursements for Charterers'
account (state maximum number of days) (Cl.10(e))
See Additional Clause No. 39
- --------------------------------------------------------------------------------
24. Interest rate payable (Cl.10(e))
12% (twelve percent)
- --------------------------------------------------------------------------------
25. Maximum audit period (Cl.10(f))
N/A
- --------------------------------------------------------------------------------
26. Meals (state rate agreed) (Cl.5(c)(i))
30 US$/day/person
- --------------------------------------------------------------------------------
27. Accommodation (state rate agreed) (Cl.5(c)(i))
- --------------------------------------------------------------------------------
28. Mutual Waiver of Recourse (optional, state whether applicable) (Cl.12(f))
applicable
- --------------------------------------------------------------------------------
29. Sublet (state amount of daily increment to charter hire) (Cl.17(b))
not applicable
- --------------------------------------------------------------------------------
30. War (state name of countries) (Cl.19(e))
not applicable
- --------------------------------------------------------------------------------
31. General average (place of settlement-only to be filled in if other than
London) (Cl.21)
LONDON, UK
- --------------------------------------------------------------------------------
32. Breakdown (state period) (Cl.26(b)(v))
2 (two) days
- --------------------------------------------------------------------------------
33. Law and arbitration (state Cl.31(a) or 31(b) or 31(c), as agreed; if
Cl.31 (c) agreed also state place of arbitration) (Cl.31)
Clause 31(a)- LONDON, (England)
- --------------------------------------------------------------------------------
34. Numbers of additional clauses covering special provisions, if agreed
6 - 37 to 42 both inclusive
- --------------------------------------------------------------------------------
35. Names and addresses for notices and other communications required to be
given by the Owners (Cl.28)
See Box 2
- --------------------------------------------------------------------------------
36. Names and addresses for notices and other communications required to be
given by the Charterers (Cl.28)
See Box 3
- --------------------------------------------------------------------------------
It is mutually agreed that this Contract shall be performed subject to the
conditions contained in the Charter consisting of PART I, including additional
clauses if any agreed and stated in Box 34, and PART II as well as ANNEX "A",
and ANNEX "B", as annexed to this Charter. In the event of a conflict of
conditions, the provisions of PART I shall prevail over those of PART II and
ANNEX "A", and ANNEX "B", to the extent of such and ANNEX conflict but no
further Annex "C" as annexed to this Charter is optional and shall only apply if
expressly agreed and stated in Box 28.
- --------------------------------------------------------------------------------
Signature (Owners) Signature (Charterers)
Pierre DAVID,
President Directeur General
/s/ Pierre David /s/ G. H. Tulloch
- --------------------------------------------------------------------------------
This document is a computer generated SUPPLYTIME 89 form printed by authority
of The Baltic and International Maritime Council (BIMCO), using software which
is copyright of Strategic Software Ltd. (SSL). Any insertion or deletion to the
form must be clearly visible. In the event of any modifications made to the
preprinted text of this document, and which is not clearly visible, then the
original BIMCO approved shall apply. BIMCO and SSL, assume no responsibility
for any loss or damage caused as a result of discrepancies between the original
BIMCO approved document and this document.
<PAGE> 3
PART II
"SUPPLYTIME 89" Uniform Charter Party for Offshore Service Vessels
1. Period
(a) The Owners stated in Box 2 let and the Charterers stated in Box 3
hire the Vessel named in Box 4, as specified in ANNEX "A" (hereinafter
referred to as "the Vessel"), for the period as stated in Box 9 from the
time the Vessel is delivered to the Charterers.
(b) Subject to Clause 10(b), the Charterers have the option to extend the
Charter Period in direct continuation for the period stated in Box 10(i),
but such an option must be declared in accordance with Box 10(ii).
(c) The Charter Period shall automatically be extended for the time
required to complete the voyage or well (whichever is stated in Box
11(i)) in progress, such time not to exceed the period stated in Box
11(ii).
2. Delivery and Redelivery
(a) Delivery. -- Subject to sub-clause (b) of this Clause the Vessel
shall be delivered by the Owners free of cargo and with clean tanks at
any time between the date stated in Box 5 and the date stated in Box 6 at
the port or place stated in Box 7 where the Vessel can safely lie always
afloat.
(b) Mobilisation. -- (i) The Charterers shall pay a lump sum as stated in
Box 12 without discount by way of mobilisation charge in consideration of
the Owners giving delivery at the port or place stated in Box 7. The
mobilisation charge shall not be affected by any change in the port or
place of mobilisation from that stated in Box 13.
(ii) Should the Owners agree to the Vessel loading and transporting cargo
and/or undertaking any other service for the Charterers en route to the
port of delivery or from the port of redelivery, then all terms and
conditions of this Charter Party shall apply to such loading and
transporting and/or other service exactly as if performed during the
Charter Period excepting only that any lump sum freight agreed in respect
thereof shall be payable on shipment or commencement of the service as
the case may be, the Vessel and/or goods lost or not lost.
(c) Cancelling. -- If the Vessel is not delivered by midnight local time
on the cancelling date stated in Box 6, the Charterers shall be entitled
to cancel this Charter Party. However, if despite the exercise of due
diligence by the Owners, the Owners will be unable to deliver the Vessel
by the cancelling date, they may give notice in writing to the Charterers
at any time prior to the delivery date as stated in Box 5, and shall
state in such notice the date by which they will be able to deliver the
Vessel. The Charterers may within 24 hours of receipt of such notice give
notice in writing to the Owners cancelling this Charter Party. If the
Charterers do not give such notice, then the later date specified in the
Owner's notice shall be substituted for the cancelling date for all the
purposes of this Charter Party. In the event the Charterers cancel the
Charter Party, it shall terminate on terms that neither party shall be
liable to the other for any losses incurred by reason of the non-delivery
of the Vessel or the cancellation of the Charter Party.
(d) Redelivery. -- The Vessel shall be redelivered on the expiration or
earlier termination of this Charter Party free of cargo and with clean
tanks at the port or place as stated in Box 8(i) or such other port or
place as may be mutually agreed. The Charterers shall give not less than
the number of days notice in writing of their intention to redeliver the
Vessel, as stated in Box 8(ii).
(e) Demobilisation. -- The Charterers shall pay a lump sum without
discount in the amount as stated in Box 16 by way of demobilisation
charge which amount shall be paid on the expiration or on earlier
termination of this Charter Party.
3. Condition of Vessel
(a) The Owners undertake that at the date of delivery under this Charter
Party the Vessel shall be of the description and classification as
specified in ANNEX "A", attached hereto, and undertake to so maintain the
Vessel during the period of service under this Charter Party.
(b) The Owners shall before and at the date of delivery of the Vessel and
throughout the Charter Period exercise due diligence to make and maintain
the Vessel tight, staunch, strong in good order and condition and,
without prejudice to the generality of the foregoing, in every way fit to
operate effectively at all times for the services as stated in Clause 5.
5. Employment and Area of Operation (See also Additional Clause 37)
(a) The Vessel shall be employed in offshore activities which are lawful
in accordance with the law of the place of the Vessel's flag and/or
registration and of the place of operation. Such activities shall be
restricted to the service(s) as stated in Box 18, and to voyages between
any good and safe port or place and any place where the Vessel can safely
lie always afloat within the Area of Operation as stated in Box 17 which
shall always be within Institute Warranty Limits and which shall in no
circumstances be exceeded without prior agreement and adjustment of the
Hire and in accordance with such other terms as appropriate to be agreed;
provided always that the Charterers do not warrant the safety of any such
port or place but shall exercise due diligence in issuing their orders to
the Vessel as if the Vessel were their own property and having regard to
her capabilities and the nature of her employment. Unless otherwise
agreed, the Vessel shall not be employed as a diving platform.
(b) Relevant permission and licences from responsible authorities for the
Vessel to enter, work in and leave the Area of Operation shall be
obtained by the Charterers and the Owners shall assist, if necessary, in
every way possible to secure such permission and licenses.
(c) The Vessel's Space. -- The whole reach and burden and decks of the
Vessel shall throughout the Charter Period be at the Charterers' disposal
reserving proper and sufficient space for the Vessel's Master, Officers,
Crew, tackle, apparel, furniture, provisions and stores. The Charterers
shall be entitled to carry, so far as space is available and for their
purposes in connection with their operations:
(i) Persons other than crew members, including TV and filming crews,
other than fare paying, and for such purposes to make use of the
Vessel's available accommodation not being used on the voyage by
the Vessel's Crew. The Owners shall provide suitable provisions
and requisites for such persons for which the Charterers shall pay
at the rate as stated in Box 26 per meal and at the rate as stated
in Box 27 per day for the provision of bedding and services for
persons using berth accommodation.
(ii) Lawful cargo whether carried on or under deck.
(iii) Explosives and dangerous cargo, whether in bulk or packaged,
provided proper notification has been given and such cargo is
marked and packed in accordance with the national regulations of
the Vessel and/or the International Maritime Dangerous Goods Code
and/or other pertinent regulations. Failing such proper
notification, marking or packing the Charterers shall indemnify
the Owners in respect of any loss, damage or liability whatsoever
and howsoever arising therefrom. The Charterers accept
responsibility for any additional expenses (including
reinstatement expenses) incurred by the Owners in relation to the
carriage of explosives and dangerous cargo.
(iv) Hazardous and noxious substances, subject to Clause 12(g), proper
notification and any pertinent regulations.
(d) Laying-up of Vessel. -- The Charterers shall have the option of
laying up the Vessel at an agreed safe port or place for all or any
portion of the Charter Period in which case the Hire hereunder shall
continue to be paid but, if the period of such lay-up exceeds 30
consecutive days there shall be credited against such Hire the amount
which the Owners shall reasonably have saved by way of reduction in
expenses and overheads as a result of the lay-up of the Vessel.
6. Master and Crew
(a) (i) The Master shall carry out his duties promptly and the Vessel
shall render all reasonable services within her capabilities by day and
by night and at such times and on such schedules as the Charterers may
reasonably require without any obligations of the Charterers to pay to
the Owners or the Master, Officers or the Crew of the Vessel any excess
or overtime payments. The Charterers shall furnish the Master with all
instructions and sailing directions and the Master and Engineer shall
keep full and correct logs accessible to the Charterers or their agents.
(ii) The Master shall sign cargo documents as and in the form presented,
the same, however, not to be Bills of Lading, but receipts which shall be
non-negotiable documents and shall be marked as such. The Charterers
shall indemnify the Owners against all consequences and liabilities
arising from the Master, Officers or agents signing, under the direction
of the Charterers, those cargo documents or other documents inconsistent
with this Charter Party or from any irregularity in the papers supplied
by the Charterers or their agents.
(b) The Vessel's Crew if required by Charterers will connect and
disconnect electric cables, fuel, water and pneumatic hoses when placed
on board the Vessel in port as well as alongside the offshore units; will
operate the machinery on board the Vessel for loading and unloading
cargoes; and will hook and unhook cargo on board the Vessel when loading
or discharging alongside offshore units. If the port regulations or the
seamen and/or labour unions do not permit the Crew of the Vessel to carry
out any of this work, then the Charterers shall make, at their own
expense, whatever other arrangements may be necessary, always under the
direction of the Master.
(c) if the Charterers have reason to be dissatisfied with the conduct of
the Master or any Officer or member of the Crew, the Owners on receiving
particulars of the complaint shall promptly investigate the matter and if
the complaint proves to be well founded, the Owners shall as soon as
reasonably possible make appropriate changes in the appointment.
(d) The entire operation, navigation, and management of the Vessel shall
be in the exclusive control and command of the Owners, their Master,
Officers and Crew. The Vessel will be operated and the services hereunder
will be rendered as requested by the Charterers, subject always to the
exclusive right of the Owners or the Master of the Vessel to determine
whether operation of the Vessel may be safely undertaken. In the
performance of the Charter Party, the Owners are deemed to be an
independent contractor, the Charterers being concerned only with the
results of the services performed.
7. Owners to Provide
(a) The Owners shall provide and pay for all provisions, wages and all
other expenses of the Master, Officers and Crew; all maintenance and
repair of the Vessel's hull, machinery and equipment as specified in
ANNEX "A"; also, except as otherwise provided in this Charter Party, for
all insurance on the Vessel, all dues and charges directly related to the
Vessel's flag and/or registration, all deck, cabin and engineroom stores,
cordage required for ordinary ship's purposes mooring alongside in
harbour, and all fumigation expenses and de-ratisation certificates. The
Owners' obligations under this Clause extend to cover all liabilities for
consular charges appertaining to the
This document is a computer generated SUPPLYTIME 89 form printed by authority of
The Baltic and International Maritime Council (BIMCO), using software which is
copyright of Strategic Software Ltd. (SSL). Any insertion or deletion to the
form must be clearly visible. In the event of any modifications made to the
preprinted text of this document, and which is not clearly visible, then the
original BIMCO approved shall apply. BIMCO and SSL, assume no responsibility
for any loss or damage caused as a result of discrepancies between the
original BIMCO approved document and this document.
<PAGE> 4
PART II
"SUPPLYTIME 89" Uniform Charter Party for Offshore Service Vessels
Master, Officers and Crew, customs or import duties arising at any time
during the performance of this Charter Party in relation to the personal
effects of the Master, Officers and Crew, and in relation to the stores,
provisions and other matters as aforesaid which the Owners are to provide
and/or pay for and the Owners shall refund to the Charterers any sums
they or their agents may have paid or been compelled to pay in respect of
such liability.
(b) On delivery the Vessel shall be equipped, if appropriate, at the
Owners' expense with any towing and anchor handling equipment specified
in Section 5(b) of ANNEX "A". If during the Charter Period any such
equipment becomes lost, damaged or unserviceable, other than as a result
of the Owners' negligence, the Charterers shall either provide, or direct
the Owners to provide, an equivalent replacement at the Charterers'
expense.
8. Charterers to Provide (See also Additional Clause 38)
(a) While the Vessel is on hire the Charterers shall provide and pay for
all agencies and commissions incurred on the Charterers' business, costs
for security or other watchmen, and of quarantine (if occasioned by the
nature of the cargo carried or the ports visited whilst employed under
this Charter Party but not otherwise).
(b) At all times the Charterers shall provide and pay for the loading and
unloading of cargoes so far as not done by the Vessel's crew, all
necessary dunnage, uprights and shoring equipment for securing deck
cargo, all cordage except as to be provided by the Owners, all ropes,
slings and special runners actually used for loading and discharging, and
shall reimburse the Owners for the actual cost of replacement of special
mooring lines to, wires, nylon spring lines etc. used for offshore works.
(c) The Charterers shall pay for Customs duties, all permits, import
duties (including costs involved in establishing temporary or permanent
importation bonds), and clearance expenses, both for the Vessel and/or
equipment, required for or arising out of this Charter Party.
9. Bunkers
Unless otherwise agreed, the Vessel shall be delivered with bunkers and
lubricants as on board and redelivered with sufficient bunkers to reach
the next bunkering stage en route to her next port of call.
10. Hire and Payments (See also Additional Clause 39)
(a) Hire -- The Charterers shall pay Hire for the Vessel at the rate
stated in Box 19 a lumpsum from the time that the Vessel is delivered to
the Charterers until the expiration or earlier termination of this
Charter.
(b) Extension Hire. -- If the option to extend the Charter Period under
Clause 1(b) is exercised, Hire for such extension shall, unless stated in
Box 20, be mutually agreed between the Owners and the Charterers.
(c) Adjustment of Hire. -- The rate of hire shall be adjusted to reflect
documented changes, after the date of entering into the Charter Party or
the date of commencement of employment, whichever is earlier, in the
Owners' costs arising from changes in the Charterers' requirements or
regulations governing the Vessel and/or its Crew or this Charter Party.
(d) Invoicing. -- All invoices shall be issued in the contract currency
stated in Box 19. In respect of reimbursable expenses incurred in
currencies other than the contract currency, the rate of exchange into
the contract currency shall be that quoted by the Central Bank of the
country of such other currency as at the date of the Owners' invoice.
Invoices covering Hire and any other payments due shall be issued monthly
as stated in Box 21(i) or at the expiration or earlier termination of
this Charter Party. Notwithstanding the foregoing, bunkers and
lubricants on board at delivery shall be invoiced at the time of
delivery.
(e) Payments. -- Payments of Hire, bunker invoices and disbursements for
the Charterers' account shall be received within the number of days
stated in Box 23 from the date of receipt of the invoice. Payment shall
be made in the contract currency in full without discount to the account
stated in Box 22. However any advances for disbursements made on behalf
of and approved by the Owners may be deducted from Hire due.
If payment is not received by the Owners within 5 banking days following
the due date the Owners are entitled to charge interest at the rate
stated in Box 24 on the amount outstanding from and including the due
date until payment is received.
Where an invoice is disputed, the Charterers shall in any event pay the
undisputed portion of the invoice but shall be entitled to withold
payment of the disputed portion provided that such portion is reasonably
disputed and the Charterers specify such reason. Interest will be
chargeable at the rate stated in Box 24 on such disputed amounts where
resolved in favour of the Owners. Should the Owners prove the validity of
the disputed portion of the invoice, balance payment shall be received by
the Owners within 5 banking days after the dispute is resolved. Should
the Charterers' claim be valid, a corrected invoice shall be issued by
the Owners.
In default of payment as herein specified, the Owners may require the
Charterers to make payment of the amount due within 5 banking days of
receipt of notification from the Owners; failing which the Owners shall
have the right to withdraw the Vessel without prejudice to any claim the
Owners may have against the Charterers under this Charter Party.
While payment remains due the Owners shall be entitled to suspend the
performance of any and all of their obligations hereunder and shall have
no responsibility whatsoever for any consequences thereof, in respect of
which the Charterers hereby indemnify the Owners, and Hire shall continue
to accrue and any extra expenses resulting from such suspension shall be
for the Charterers' account.
11. Suspension of Hire
(a) If as a result of any deficiency of Crew or of the Owners' stores,
strike of Master, Officers and Crew, breakdown of machinery, damage to
hull or other accidents to the Vessel, the Vessel is prevented from
working, no Hire shall be Payable in respect of any time lost and any
Hire paid in advance shall be adjusted accordingly provided always
however that Hire shall not cease in the event of the Vessel being
prevented from working as aforesaid as a result of:
(i) the carriage of cargo as noted in Clause 5(c)(iii) and (iv);
(ii) quarantine or risk of quarantine unless caused by the Master,
Officers or Crew having communication with the shore at any
infected area not in connection with the employment of the Vessel
without the consent or the instructions of the Charterers;
(iii) deviation from her Charter Party duties or exposure to abnormal
risks at the request of the Charterers;
(iv) detention in consequence of being driven into port or to anchorage
through stress of weather or trading to shallow harbours or to
river or ports with bars or suffering an accident to her cargo,
when the expenses resulting from such detention shall be for the
Charterers' account howsoever incurred;
(v) detention or damage by ice;
(vi) any act or omission of the Charterers, their servants or agents.
(b) Liability for Vessel not Working. -- The Owners' liability for any
loss, damage or delay sustained by the Charterers as a result of the
Vessel being prevented from working by any cause whatsoever shall be
limited to suspension of hire.
12. Liabilities and Indemnities
(a) Owners. -- Notwithstanding anything else contained in this Charter
Party excepting Clauses 5(c)(iii), 7(b), 8(b), 12(g), 15(c) and 21, the
Charterers shall not be responsible for loss of or damage to the property
of the Owners or of their contractors and sub-contractors, including the
Vessel, or for personal injury or death of the employees of the Owners or
of their contractors and sub-contractors, arising out of or in any way
connected with the performance of this Charter Party, even if such loss,
damage, injury or death is caused wholly or partially by the act,
neglect, or default of the Charterers, their employees, contractors or
sub-contractors, and even if such loss, damage, injury or death is caused
wholly or partially by unseaworthiness of any vessel; and the Owners
shall indemnify, protect, defend and hold harmless the Charterers from
any and against all claims, costs, expenses, actions, proceedings, suits,
demands and liabilities whatsoever arising out of or in connection with
such loss, damage, personal injury or death.
The Owners shall not be held liable for any delay caused by a strike by
persons other than the Owner's own employees or agents.
(b) Charterers. -- Notwithstanding anything else contained in this
Charter Party excepting Clause 21, the Owners shall not be responsible
for loss of,
This document is a computer generated SUPPLYTIME 89 form printed by authority of
The Baltic and International Maritime Council (BIMCO), using software which is
copyright of Strategic Software Ltd. (SSL). Any insertion or deletion to the
form must be clearly visible. In the event of any modifications made to the
preprinted text of this document, and which is not clearly visible, then the
original BIMCO approved shall apply. BIMCO and SSL, assume no responsibility
for any loss or damage caused as a result of discrepancies between the
original BIMCO approved document and this document.
<PAGE> 5
PART II
"SUPPLYTIME 89" Uniform Charter Party for Offshore Service Vessels
damage to, or any liability arising out of anything towed by the Vessel,
any cargo laden upon or carried by the Vessel or her tow, the property of
the Charterers or of their contractors and sub-contractors, or for
personal injury or death of the employees of the Charterers or of their
contractors and sub-contractors (other than the Owners and their
contractors and sub-contractors) or of anyone on board including
journalists, TV companies and all persons invited on board by the
Charterers, anything towed by the Vessel, arising out of or in any way
connected with the performance of this Charter Party, even if such loss,
damage, liability, injury or death is caused wholly or partially by the
act, neglect or default of the Owners, their employees, contractors or
sub-contractors, and even if such loss, damage, liability, injury or
death is caused wholly or partially by the unseaworthiness of any vessel;
and the Charterers shall indemnify, protect, defend and hold harmless the
Owners from any and against all claims, costs, expenses, actions,
proceedings, suits, demands, and liabilities whatsoever arising out of or
in connection with such loss, damage, liability, personal injury or
death.
(c) Consequential Damages. -- Neither party shall be liable to the other
for, and each party hereby agrees to protect, defend and indemnify the
other against, any consequential damages whatsoever arising out of or in
connection with the performance or non-performance of this Charter Party,
including, but not limited to, loss of use, loss of profits, shut-in or
loss of production and cost of insurance.
(d) Limitations. -- Nothing contained in this Charter Party shall be
construed or held to deprive the Owners or the Charterers, as against any
person or party, including as against each other, of any right to claim
limitation of liability provided by any applicable law, statute or
convention, save that nothing in this Charter Party shall create any
right to limit liability. Where the Owners or the Charterers may seek an
indemnity under the provisions of this Charter Party or against each
other in respect of a claim brought by a third party, the Owners or the
Charterers shall seek to limit their liability against such third party.
(e) Himalaya Clause. -- (i) All exceptions, exemptions, defences,
immunities, limitations of liability, indemnities, privileges and
conditions granted or provided by this Charter Party or by any applicable
statute, rule or regulation for the benefit of the Charterers shall also
apply to and be for the benefit of the Charterers' parent, affiliated,
related and subsidiary companies; the Charterers' contractors,
sub-contractors, clients, joint venturers and joint interest owners
(always with respect to the job or project on which the Vessel is
employed); their respective employees end their respective underwriters.
(ii) All exceptions, exemptions, defences, immunities, limitations of
liability, indemnities, privileges and conditions granted or provided by
this Charter Party or by any applicable statute, rule or regulation for
the benefit of the Owners shall also apply to and be for the benefit of
the Owners' parent, affiliated, related and subsidiary companies, the
Owners' sub-contractors, the Vessel, its Master, Officers and Crew, its
registered owner, its operator, its demise charterer(s), their respective
employees and their respective underwriters.
(iii) The Owners or the Charterers shall be deemed to be acting as agent
or trustee of and for the benefit of all such persons and parties set
forth above, but only for the limited purpose of contracting for the
extension of such benefits to such persons and parties.
(f) Mutual Waiver of Recourse (Optional, only applicable if stated in Box
28, but regardless of whether this option is exercised the other
provisions of Clause 12 shall apply and shall be paramount)
In order to avoid disputes regarding liability for personal injury or
death of employees or for loss of or damage to property, the Owners and
the Charterers have entered into, or by this Charter Party agree to enter
into, an Agreement for Mutual Indemnity and Waiver of Recourse (in a form
substantially similar to that specified in ANNEX "C") between the Owners,
the Charterers and the various contractors and sub-contractors of the
Charterers.
(g) Hazardous and Noxious Substances. -- Notwithstanding any other
provision of this Charter Party to the contrary, the Charterers shall
always be responsible for any losses, damages or liabilities suffered by
the Owners, their employees, contractors or sub-contractors, by the
Charterers, or by third parties, with respect to the Vessel or other
property, personal injury or death, pollution or otherwise, which losses,
damages or liabilities are caused, directly or indirectly, as a result of
the Vessel's carriage of any hazardous and noxious substances in whatever
form as ordered by the Charterers, and the Charterers shall defend,
indemnify the Owners and hold the Owners harmless for any expense, loss
or liability whatsoever or howsoever arising with respect to the carriage
of hazardous or noxious substances.
13. Pollution
(a) Except as otherwise provided for in Clause 15(c)(iii), the Owners
shall be liable for, and agree to indemnify, defend and hold harmless the
Charterers against, all claims, costs, expenses, actions, proceedings,
suits, demands and liabilities whatsoever arising out of actual or
potential pollution damage and the cost of cleanup or control thereof
arising from acts or omissions of the Owners or their personnel which
cause or allow discharge, spills or leaks from the Vessel, except as may
emanate from cargo thereon or therein.
(b) The Charterers shall be liable for and agree to indemnify, defend and
hold harmless the Owners from all claims, costs, expenses, actions,
proceedings, suits, demands, liabilities, loss or damage whatsoever
arising out of or resulting from any other actual or potential pollution
damage, even where caused wholly or partially by the act, neglect or
default of the Owners, their employees, contractors or sub-contractors or
by the unseaworthiness of the Vessel.
14. Insurance
(a)(i) The Owners shall procure and maintain in effect for the duration
of this Charter Party, with reputable insurers, the insurances set forth
in ANNEX "B". Policy limits shall not be less than those indicated.
Reasonable deductibles are acceptable and shall be for the account of the
Owners.
(ii) The Charterers shall upon request be named as co-insured. The Owners
shall upon request cause insurers to waive subrogation rights against the
Charterers (as encompassed in Clause 12(e)(i)). Co-insurance and/or
waivers of subrogation shall be given only insofar as these relate to
liabilities which are properly the responsibility of the Owners under the
terms of this Charter Party.
(b) The Owners shall upon request furnish the Charterers with
certificates of insurance which provide sufficient information to verify
that the Owners have complied with the insurance requirements of this
Charter Party.
(c) If the Owners fail to comply with the aforesaid insurance
requirements, the Charterers may, without prejudice to any other rights
or remedies under this Charter Party, purchase similar coverage and
deduct the cost thereof from any payment due to the Owners under this
Charter Party.
15. Saving of Life and Salvage (See also Additional Clause 40)
(a) The Vessel shall be permitted to deviate for the purpose of saving
life at sea without prior approval of or notice to the Charterers and
without loss of Hire provided however that notice of such deviation is
given as soon as possible.
(b) Subject to the Charterers' consent, which shall not be unreasonably
withheld, the Vessel shall be at liberty to undertake attempts at
salvage, it being understood that the Vessel shall be off hire from the
time she leaves port or commences to deviate and she shall remain
off-hire until she is again in every way ready to resume the Charterers'
service at a position which is not less favourable to the Charterers than
the position at the time of leaving port or deviating for the salvage
services.
All salvage monies earned by the Vessel shall be divided equally between
the Owners and the Charterers, after deducting the Master's, Officers'
and Crew's share, legal expenses, value of fuel and lubricants consumed,
Hire of the Vessel lost by the Owners during the salvage, repairs to
damage sustained, if any, and any other extraordinary loss or expense
sustained as a result of the salvage.
The Charterers shall be bound by all measures taken by the Owners in
order to secure payment of salvage and to fix its amount.
(c) The Owners shall waive their right to claim any award for salvage
performed on property owned by or contracted to the Charterers, always
provided such property was the object of the operation the Vessel was
chartered for, and the Vessel shall remain on hire when rendering salvage
services to such property. This waiver is without prejudice to any right
the Vessel's Master, Officers and Crew may have under any title.
If the Owners render assistance to such property in distress on the basis
of "no claim for salvage", then, notwithstanding any other provisions
contained in this Charter Party and even in the event of neglect or
default of the Owners, Master, Officers or Crew:
(i) The Charterers shall be responsible for and shall indemnify the
Owners against payments made, under any legal rights, to the
Master, Officers and Crew in relation to such assistance.
(ii) The Charterers shall be responsible for and shall reimburse the
Owners for any loss or damage sustained by the Vessel or her
equipment by reason of giving such assistance and shall also pay
the Owners' additional expenses thereby incurred.
(iii) The Charterers shall be responsible for any actual or potential
spill, seepage and/or emission of any pollutant howsoever caused
occurring within the offshore site and any pollution resulting
therefrom, wheresoever it may occur and including but not limited
to the cost of such measures as are reasonably necessary to
prevent or mitigate pollution damage, and the Charterers shall
indemnity the Owners against any liability, cost or expense
arising by reason of such actual or potential spill, seepage
and/or emission.
(iv) The Vessel shall not be off-hire as a consequence of giving such
assistance, or effecting repairs under sub-paragraph (ii) of this
sub-clause, and time taken for such repairs shall not count
against time granted under Clause 11(c).
(v) The Charterers shall indemnify the Owners against any liability,
cost and/or expense whatsoever in respect of any loss of life,
injury, damage or other loss to person or property howsoever
arising from such assistance.
16. Lien
The Owners shall have a lien upon all cargoes for all claims against the
Charterers under this Charter Party and the Charterers shall have a lien
on the Vessel for all monies paid in advance and not earned. The
Charterers will not suffer, nor permit to be continued, any lien or
encumbrance incurred by them or their agents, which might have priority
over the title and interest of the Owners in the Vessel. Except as
provided in Clause 12, the Charterers shall indemnify and hold the Owners
harmless against any lien of whatsoever nature arising upon the Vessel
during the Charter Period while she is under the control of the
Charterers, and against any claims against the Owners arising out of the
operation of the Vessel by the Charterers or out of any neglect of the
Charterers in relation to the Vessel or the operation thereof. Should the
Vessel be arrested by reason of claims or liens arising out of her
operation hereunder, unless brought about by the act or neglect of the
Owners, the Charterers shall at their own expense take all reasonable
steps to secure that within a reasonable time the Vessel is released and
at their own
This document is a computer generated SUPPLYTIME 89 form printed by authority of
The Baltic and International Maritime Council (BIMCO), using software which is
copyright of Strategic Software Ltd. (SSL). Any insertion or deletion to the
form must be clearly visible. In the event of any modifications made to the
preprinted text of this document, and which is not clearly visible, then the
original BIMCO approved shall apply. BIMCO and SSL, assume no responsibility
for any loss or damage caused as a result of discrepancies between the
original BIMCO approved document and this document.
<PAGE> 6
PART II
"SUPPLYTIME 89" Uniform Charter Party for Offshore Service Vessels
expense put up bail to secure release of the Vessel.
17. Sublet and Assignment
(a) Charterers. - The Charterers shall have the option of subletting,
assigning or loaning the Vessel to any person or company not competing
with the Owners, subject to the Owners' prior approval which shall not be
unreasonably withheld, upon giving notice in writing to the Owners, but
the original Charterers shall always remain responsible to the Owners for
due performance of the Charter Party and contractors of the person or
company taking such subletting, assigning or loan shall be deemed
contractors of the Charterers for all the purposes of this Charter Party.
The Owners make it a condition of such consent that additional Hire shall
be paid as agreed between the Charterers and the Owners having regard to
the nature and period of any intended service of the Vessel.
(b) If the Vessel is sublet, assigned or loaned to undertake rig anchor
handling and/or towing operations connected with equipment, other than
that used by the Charterers, then a daily increment to the Hire in the
amount as stated in Box 29 or pro rata shall be paid for the period
between departure for such operations and return to her normal duties for
the Charterers.
(c) Owners. - The Owners may not assign or transfer any part of this
Charter Party without the written approval of the Charterers, which
approval shall not be unreasonably withheld.
Approval by the Charterers of such subletting or assignment shall not
relieve the Owners of their responsibility for due performance of the
part of the services which is sublet or assigned.
18. Substitute Vessel
The Owners shall be entitled at any time, whether before delivery or at
any other time during the Charter Period, to provide a substitute vessel,
subject to the Charterers' prior approval which shall not be unreasonably
withheld.
19. War
(a) Unless the consent of the Owners be first obtained, the Vessel shall
not be ordered nor continue to any port or place or on any voyage nor be
used on any service which will bring the Vessel within a zone which is
dangerous as a result of any actual or threatened act of war, war,
hostilities, warlike operations, acts of piracy or of hostility or
malicious damage against this or any other vessel or its cargo by any
person, body or state whatsoever, revolution, civil war, civil commotion
or the operation of international law, nor be exposed in any way to any
risks or penalties whatsoever consequent upon the imposition of
sanctions, nor carry any goods that may in any way expose her to any
risks of seizure, capture, penalties or any other interference of any
kind whatsoever by the belligerent or fighting powers or parties or by
any government or rulers.
(b) Should the Vessel approach or be brought or ordered within such zone,
or be exposed in any way to the said risks, (i) the Owners shall be
entitled from time to time to insure their interest in the Vessel for
such terms as they deem fit up to its open market value and also in the
Hire against any of the risks likely to be involved thereby, and the
Charterers shall make a refund on demand of any additional premium
thereby incurred, and (ii) notwithstanding the terms of Clause 11 Hire
shall be payable for all time lost including any loss owing to loss of or
injury to the Master, Officers, Crew or passengers or to refusal by any
of them to proceed to such zone or to be exposed to such risks.
(c) In the event of additional insurance premiums being incurred or the
wages of the Master and/or Officers and/or Crew and/or the cost of
provisions and/or stores for deck and/or engine room being increased by
reason of or during the existence of any of the matters mentioned in
sub-clause (a) the amount of any additional premium and/or increase shall
be added to the Hire, and paid by the Charterers on production of the
Owners' account therefor, such account being rendered monthly.
(d) The Vessel shall have liberty to comply with any orders or directions
as to departure, arrival, routes, ports of call, stoppages, destination,
delivery or in any other way whatsoever given by the government of the
nation under whose flag the Vessel sails or any other government or any
person (or body) acting or purporting to act with the authority of such
government or by any committee or person having under the terms of the
war risks insurance on the Vessel the right to give any such orders or
directions.
(e) In the event of the outbreak of war (whether there be a declaration
of war or not) between any of the countries stated in Box 30 or in the
event of the nation under whose flag the Vessel sails becoming involved
in war (whether there be a declaration of war or not) either the Owners
or the Charterers may terminate this Charter Party, whereupon the
Charterers shall redeliver the Vessel to the Owners in accordance with
PART I if it has cargo on board after discharge thereof at destination
or, if debarred under this Clause from reaching or entering it, at a near
open and safe port or place as directed by the Owners, or if the Vessel
has no cargo on board, at the port or place at which it then is or if at
sea at a near, open and safe port or place as directed by the Owners. In
all cases Hire shall continue to be paid and, except as aforesaid, all
other provisions of this Charter Party shall apply until redelivery.
(f) If in compliance with the provisions of this Clause anything is done
or is not done, such shall not be deemed a deviation.
The Charterers shall procure that all Bills of Lading (if any) issued
under this Charter Party shall contain the stipulations contained in
sub-clauses (a), (d) and (f) of this Clause.
20. Excluded Ports
(a) The Vessel shall not be ordered to nor bound to enter without the
Owners' written permission (a) any place where fever or epidemics are
prevalent or to which the Master, Officers and Crew by law are not bound
to follow the Vessel; (b) any ice-bound place or any place where lights,
lightships, marks and buoys are or are likely to be withdrawn by reason
of ice on the Vessel's arrival or where there is risk that ordinarily the
Vessel will not be able on account of ice to reach the place or to get
out after having completed her operations. The Vessel shall not be
obliged to force ice nor to follow an icebreaker. If, on account of ice,
the Master considers it dangerous to remain at the loading or discharging
place for fear of the Vessel being frozen in and/or damaged, he has
liberty to sail to a convenient open place and await the Charterers'
fresh instructions.
(b) Should the Vessel approach or be brought or ordered within such
place, or be exposed in any way to the said risks, the Owners shall be
entitled from time to time to insure their interests in the Vessel and/or
Hire against any of the risks likely to be involved thereby on such terms
as they shall think fit, the Charterers to make a refund to the Owners of
the premium on demand. Notwithstanding the terms of Clause 11 Hire shall
be paid for all time lost including any lost owing to loss of or sickness
or injury to the Master, Officers, Crew or passengers or to the action of
the Crew in refusing to proceed to such place or to be exposed to such
risks.
21. General Average and New Jason Clause
General Average shall be adjusted and settled in London unless otherwise
stated in Box 31, according to York/Antwerp Rules, 1974, as may be
amended. Hire shall not contribute to General Average. Should adjustment
be made in accordance with the law and practice of the United States of
America, the following provision shall apply:
"In the event of accident, danger, damage or disaster before or after the
commencement of the voyage, resulting from any cause whatsoever, whether
due to negligence or not, for which, or for the consequence of which, the
Owners are not responsible, by statute, contract or otherwise, the cargo,
shippers, consignees or owners of the cargo shall contribute with the
Owners in General Average to the payment of any sacrifices, loss or
expenses of a General Average nature that may be made or incurred and
shall pay salvage and special charges incurred in respect of the cargo.
If a salving vessel is owned or operated by the Owners, salvage shall be
paid for as fully as if the said salving vessel or vessels belonged to
strangers. Such deposit as the Owners, or their agents, may deem
sufficient to cover the estimated contribution of the cargo and any
salvage and special charges thereon shall, if required, be made by the
cargo, shippers, consignees or owners of the cargo to the Owners before
delivery".
22. Both-to-Blame Collision Clause
If the Vessel comes into collision with another ship as a result of the
negligence of the other ship and any act, neglect or default of the
Master, mariner, pilot or the servants of the Owners in the navigation or
the management of the Vessel, the Charterers will indemnify the Owners
against all loss or liability to the other or non-carrying ship or her
owners insofar as such loss or liability represent loss of or damage to,
or any claim whatsoever of the owners of any goods carried under this
Charter Party paid or payable by the other or non-carrying ship or her
owners to the owners of the said goods and set-off, recouped or recovered
by the other or non-carrying ship or her owners as part of their claim
against the Vessel or the Owners, The foregoing provisions shall also
apply where the owners, operators or those in charge of any ship or ships
or objects other than or in addition to the colliding ships or objects
are at fault in respect of a collision or contact.
23. Structural Alterations and Additional Equipment
See Additional Clause 41
The Charterers shall have the option of, at their expense, making
structural alterations to the Vessel or installing additional equipment
with the written consent of the Owners which shall not be unreasonably
withheld but unless otherwise agreed the Vessel is to be redelivered
reinstated, at the Charterers' expense, to her original condition. The
Vessel is to remain on hire during any period of these alterations or
reinstatement. The Charterers, unless otherwise agreed, shall be
responsible for repair and maintenance of any such alteration or
additional equipment.
24. Health and Safety
The Owners shall comply with and adhere to all applicable international,
national and local regulations pertaining to health and safety, and such
Charterers' instructions as may be appended hereto.
25. Taxes
Each party shall pay taxes due on its own profit, income and personnel.
The Charterers shall pay all other taxes and dues arising out of the
operation or use of the Vessel during the Charter Period.
In the event of change in the Area of Operation or change in local
regulation and/or interpretation thereof, resulting in an unavoidable and
documented change of the Owners' tax liability after the date of entering
into the Charter Party or the date of commencement of employment,
whichever is the earlier, Hire shall be adjusted accordingly.
26. Early Termination
(a) For Charterers' Convenience. -- The Charterers may terminate this
Charter Party at any time by giving the Owners written notice as stated
in Box 15 and by paying the settlement stated in Box 14 and the
demobilisation charge stated in Box 16, as well as Hire or other payments
due under the Charter Party.
This document is a computer generated SUPPLYTIME 89 form printed by authority of
The Baltic and International Maritime Council (BIMCO), using software which is
copyright of Strategic Software Ltd. (SSL). Any insertion or deletion to the
form must be clearly visible. In the event of any modifications made to the
preprinted text of this document, and which is not clearly visible, then the
original BIMCO approved shall apply. BIMCO and SSL, assume no responsibility
for any loss or damage caused as a result of discrepancies between the
original BIMCO approved document and this document.
<PAGE> 7
PART II
"SUPPLYTIME 89" Uniform Charter Party for Offshore Service Vessels
(b) For Cause. - If either party becomes informed of the occurrence of
any event described in this Clause that party shall so notify the other
party promptly in writing and in any case within 3 days after such
information is received. If the occurrence has not ceased within 3 days
after such notification has been given, this Charter Party may be
terminated by either party, without prejudice to any other rights which
either party may have, under any of the following circumstances:
(i) Requisition. - If the government of the state of registry and/or
the flag of the Vessel, or any agency thereof, requisitions for
hire or title or otherwise takes possession of the Vessel during
the Charter Period.
(ii) Confiscation - If any government, individual or group, whether or
not purporting to act as a government or on behalf of any
government, confiscates, requisitions, expropriates, seizes or
otherwise takes possession of the Vessel during the Charter
Period.
(iii) Bankruptcy - In the event of an order being made or resolution
passed for the winding up, dissolution, liquidation or bankruptcy
of either party (otherwise than for the purpose of reconstruction
or amalgamation) or if a receiver is appointed or if it suspends
payment or ceases to carry on business.
(iv) Loss of Vessel. - If the Vessel is lost, actually or
constructively, or missing, unless the Owners provide a substitute
vessel pursuant to Clause 18. In the case of termination, Hire
shall cease from the date the Vessel was lost or, in the event of
a constructive total loss, from the date of the event giving rise
to such loss. If the date of loss cannot be ascertained or the
Vessel is missing, payment of Hire shall cease from the date the
Vessel was last reported.
(v) Breakdown. - If, at any time during the term of this Charter
Party, a breakdown of the Owners' equipment or Vessel results in
the Owners' being unable to perform their obligations hereunder
for a period exceeding that stated in Box 32, unless the Owners
provide a substitute Vessel pursuant to Clause 18.
All sums paid at the date of breaddown by Charterers will be kept
by the Owners
(vi) Force Majeure - If a force majeure condition as defined in Clause
27 prevails for a period exceeding 15 consecutive days.
(vii) Default. - If either party is in repudiatory breach of its
obligations hereunder.
Termination as a result of any of the above mentioned causes shall not
relieve the Charterers of any obligation for Hire and any other payments
due.
27. Force Majeure
Neither the Owners nor the Charterers shall be liable for any loss,
damages or delay or failure in performance hereunder resulting from any
force majeure event, including but not limited to acts of God, fire,
action of the elements, epidemics, war (declared or undeclared), warlike
actions, insurrection. revolution or civil strife, piracy, civil war or
hostile action, strikes or differences with workmen (except for disputes
relating solely to the Owners' or the Charterers' employees), acts of the
public enemy, federal or state laws, rules and regulations of any
governmental authorities having or asserting jurisdiction in the premises
or of any other group, organisation or informal association (whether or
not formally recognised as a government), and any other cause beyond the
reasonable control of either party which makes continuance of operations
impossible.
28. Notices and Invoices
Notices and Invoices required to be given under this Charter Party shall
be given in writing to the addresses stated in Boxes 21, 35 and 36 as
appropriate.
29. Wreck Removal
If the Vessel sinks and becomes a wreck and an obstruction to navigation
and has to be removed upon request by any compulsory law or authority
having jurisdiction over the area where the wreck is placed, the Owners
shall be liable for any and all expenses in connection with the raising,
removal, destruction, lighting or marking of the wreck.
30. Confidentiality
All information or data obtained by the Owners in the performance of this
Charter Party is the property of the Charterers, is confidential and
shall not be disclosed without the prior written consent of the
Charterers. The Owners shall use their best efforts to ensure that the
Owners, any of their sub-contractors, and employees and agents thereof
shall not disclose any such information or data.
31. Law and Arbitration
*) (a) This Charter Party shall be governed by English law and any dispute
arising out of this Charter Party shall be referred to arbitration in
London, one arbitrator being appointed by each party, in accordance with
the Arbitration Acts 1950 and 1979 or any statutory modification or
re-enactment thereof for the time being in force. On the receipt by one
party of the nomination in writing of the other party's arbitrator, that
party shall appoint their arbitrator within 14 days, failing which the
arbitrator already appointed shall act as sole arbitrator. If two
arbitrators properly appointed shall not agree they shall appoint an
umpire whose decision shall be final.
*) (b) Should any dispute arise out of this Charter Party, the matter in
dispute shall be referred to three persons at New York, one to be
appointed by each of the parties hereto, and the third by the two so
chosen; their decision or that of any two of them shall be final, and for
purpose of enforcing any award, this agreement may be made a rule of the
Court. The arbitrators shall be members of the Society of Maritime
Arbitrators, Inc. of New York and the proceedings shall be conducted in
accordance with the rules of the Society.
*) (c) Any dispute arising out of this Charter Party shall be referred to
arbitration at the place stated in Box 33 subject to the law and
procedures applicable there.
(d) If Box 33 in PART I is not filled in, sub-clause (a) of this Clause
shall apply.
*) (a), (b) and (c) are alternatives; state alternative agreed in Box 33
32. Entire Agreement
This is the entire agreement of the parties, which supersedes all
previous written or oral understandings and which may not be modified
except by written amendment signed by both parties.
33. Severability Clause
If any portion of this Charter Party is held to be invalid or
unenforceable for any reason by a court or governmental authority of
competent jurisdiction, then such portion will be deemed to be stricken
and the remainder of this Charter Party shall continue in full force and
effect.
34. Demise
Nothing herein contained shall be construed as creating a demise of the
Vessel to the Charterers.
35. Definitions
"Employees" is defined for the purposes of this Charter Party as
employees, directors, officers, servants, agents or invitees.
36. Headings
The headings of this Charter Party are for identification only and shall
not be deemed to be part hereof or be taken into consideration in the
interpretation or construction of this Charter Party.
This document is a computer generated SUPPLYTIME 89 form printed by authority of
The Baltic and International Maritime Council (BIMCO), using software which is
copyright of Strategic Software Ltd. (SSL). Any insertion or deletion to the
form must be clearly visible. In the event of any modifications made to the
preprinted text of this document, and which is not clearly visible, then the
original BIMCO approved shall apply. BIMCO and SSL, assume no responsibility
for any loss or damage caused as a result of discrepancies between the
original BIMCO approved document and this document.
<PAGE> 8
ANNEX "B" to Uniform Time Charter Party for Offshore Service Vessels [SEAL]
Code Name: "SUPPLYTIME 89" - dated
- --------------------------------------------------------------------------------
INSURANCE
Insurance policies (as applicable) to be procured and maintained by the Owners
under Clause 14:
(1) Marine Hull Insurance. -- Hull and Machinery Insurance shall be provided
by the Owners for the Vessel.
(2) Protection and Indemnity (Marine Liability) Insurance. -- Protection and
indemnity or Marine Liability insurance shall be provided for the Vessel
with a limit equal to the value under paragraph 1 above or U.S. $5
million, whichever is greater, and shall include but not be limited to
coverage for crew liability, third pasty bodily injury and property
damage liability, including collision liability, lowers liability (unless
carried elsewhere).
(3) General Third Party Liability Insurance -- Coverage shall be as per
terms of Marine Hull Insurance and/or its P & I Club cover.
(4) Workmen's Compensation and Employer's Liability Insurance for Employees
-- Covering non-employees for statutory benefits as set out and required
by local law in area of operation or area in which the Owners may become
legally obliged to pay benefits.
(6) Such other insurances as may be agreed.
<PAGE> 9
ANNEX "C" to Uniform Charter for Offshore Service Vessels [SEAL]
Code Name: "SUPPLYTIME 89" - dated
- --------------------------------------------------------------------------------
AGREEMENT FOR MUTUAL INDEMNITY AND WAIVER OF RECOURSE
(Optional, only applicable if stated in Box 28 In PART I)
This Agreement is made between the Owners and the charterers and is premised on
the following:
(a) The Charterers and the Owners have entered into a contract or agreement
dated as above regarding the performance of work or service in connection
with the Charterers' operations off-shore ("Operations");
(b) The Charterers and the Owners have entered into, or shall enter into,
contracts or agreements with other contractors for the performance of
work or service in connection with the Operations;
(c) Certain of such other contractors have signed, or may sign, counterparts
of this Agreement or substantially similar agreements relating to the
Operations ("Signatory" or collectively "Signatories"); and
(d) The Signatories wish to modify their relationship at common law and avoid
entirely disputes as to their liabilities for damage or injuries to their
respective property or employees;
In consideration of the premises and of execution of reciprocal covenants by the
other Signatories, the Owners agree that:
1. The Owners shall hold harmless, defend, indemnify and waive all rights of
recourse against the other Signatories and their respective subsidiary
and affiliate companies, employees, directors, officers, servants,
agents, invitees, vessel(s), and insurers, from and against any and all
claims, demands, liabilities or causes of action of every kind and
character. In favour of any person or party, for injury to, illness or
death of any employee of or for damage to or loss of property owned by
the Owners (or in possession of the Owners by virtue of an arrangement
made with an entity which is not a Signatory) which injury, illness,
death, damage or loss arises out of the Operations, and regardless of the
cause of such injury, illness, death, damage or loss even though caused
in whole or in part by a pre-existing defect, the negligence, strict
liability or other legal fault of other Signatories.
2. The Owners (including the Vessel) shall have no liability whatsoever for
injury, illness or death of any employee of another Signatory under the
Owners' direction by virtue of an arrangement made with such other
Signatory, or for damage to or loss of property of another Signatory in
the Owners' possession by virtue of an arrangement made with such other
Signatory. In no event shall the Owners (including the vessel) be liable
to another Signatory for any consequential damages whatsoever arising out
of or in connection with the performance or non-performance of this
Agreement, including, but not limited to, loss of use, loss of profits,
shut-in or loss of production and cost of insurance.
3. The Owners undertake to obtain from their insurers a waiver of rights of
subrogation against all other Signatories in accordance with the
provisions of this Agreement governing the mutual liability of the
Signatories with regard to the Operations.
4. The Owners shall attempt to have those of their sub-contractors which are
involved in the Operations become Signatories and shall promptly furnish
the Charterers with an original counterpart of this Agreement or of a
substantially similar agreement executed by its sub-contractors.
5. Nothing contained in this Agreement shall be construed or held to deprive
the Owners, or the Charterers, or any other Signatory as against any
person or party, including as against each other, of any right to claim
limitation of liability provided by any applicable law, statute, or
convention, save that nothing in this Agreement shall create, any right
to limit liability. Where the Owners or the Charterers or any other
Signatory may seek an indemnity under the provisions of this Agreement as
against each other in respect of a claim brought by a third party, the
Owners or the Charterers or any other Signatory shall seek to limit their
liability against such third party.
6. The Charterers shall provide the Owners with a copy of every counterpart
of this Agreement or substantially similar agreement which is executed by
another Signatory pertaining to the Operations, and shall, in signing
this, and in every counterpart of this Agreement, be deemed to be acting
as agent or trustee for the benefit of all Signatories.
7. This Agreement shall inure to the benefit of and become binding on the
Owners as to any other Signatories on the later of the date of execution
by the Owners and the date of execution of a counterpart of this
Agreement or a substantially similar agreement by such other Signatory
pertaining to the Operations.
8. Any contractor, consultant sub-contractor, etc., performing work or
service for the Charterers or another Signatory in connection with the
Operations which has not entered into a formal contract for the
performance of such work or service may nevertheless become a Signatory
by signing a counterpart of this Agreement or a substantially similar
agreement which shall govern, as to the subject of this Agreement, the
relationship between such new Signatory and the other Signatories and
also by extension its relations with the Charterers.
9. This Agreement may be executed in any number of counterparts or
substantially similar agreements as necessary but all such counterparts
shall together constitute one legal instrument.
<PAGE> 10
Additional Clauses to Uniform Charter Party of Offshore Service Supply
Vessels -- Code Name ((SUPPLYTIME 89))
- --------------------------------------------------------------------------------
37 (in addition to clause 5)
The OWNERS hereby confirm that they are authorized to enter into and perform
this charter under French Law. Permission from any other responsible Authorities
for Vessel and its Crew to work in the area defined in clause XX and box 18, if
required, shall be the responsibility of CHARTERERS and OWNERS shall assist, if
necessary, in every way possible to secure such permission. If any other country
than France prevents the performance of the TITANIC expedition, the total
charter hire defined in box 19 shall be paid to the OWNERS.
38 (in addition to clause 8)
The CHARTERER shall provide and pay for all costs, taxes, customs or import
duties arising related to parts of Titanic wreck that shall be on board the
Vessel at any time whilst employed under this Charter Party.
39 (in addition to clause 10)
CHARTER HIRE AND CONDITIONS OF PAYMENT
39.1 Payment
At the time of delivery: July 24th 300 000 USD
August 19th 150 000 USD
September 5th 150 000 USD
TOTAL - 600 000 USD (six hundred thousand
US Dollars)
39.2 Exclusion
The Charter hire as described in clause 39.1 here above includes:
- -- Supply by the Owners of two rigid inflatable heats (RIB) with 1 (one)
divers having the qualification to pilot the RIB,
- -- Fuel, gasoline and lubrificants.
The Charter hire as described in clause 39.1 here above does not include:
- -- Food for passengers and RIB pilots (divers) which is to be calculated and
invoiced using the rates stated in box 26,
- -- Telephone/facsimile/others communications done by charterers personal
using the vessel's communication systems,
- -- Harbour and shipping agent fees in Boston and Saint Johns (NFL).
1
<PAGE> 11
40 (in addition to clause 15)
Clause 15 does not apply to the activities described in box 18.
41 Operation - Structural alterations to additional equipment (in addition to
clause 23)
CHARTERERS intend to carry modifications on the vessel for the purpose of the
employment of same during charter period, such as:
ROV installation, air can to the helideck, modifications to the helideck, DGPS
other GYRO, removing of the (A) Frame.
All modifications to be carried out at charterers risks and costs.
42 AUDIO-VISUAL RIGHTS AND OTHER COMMERCIAL RIGHTS
42.1 CHARTERER'S media rights
a) The CHARTERERS shall at all times have and be entitled to the benefit of
all media, TV, audio-visual rights relating to and arising from the
activities of the charter provided the CHARTERERS quote the OWNERS as the
performer of the expedition.
b) All logos appearing on the Vessel will remain as they are and where they
are; nevertheless the CHARTERERS shall have the right to place such
additional logos as they wish on the Vessel and/or submersible and/or
ancillary equipment and/or overalls in such a position that they wish,
provided that such positioning shall not interfere with the operation of
the Vessel or submersible or any part of it or obscure any of OWNERS or
other logos or names currently on the Vessel or the submersible and its
ancillary equipment.
c) In the same way the OWNERS shall be permitted to have its crew wearing
overalls with its logo.
42.2 OWNERS media right
a) All press materials, releases and other information regarding the TITANIC
expedition intended to be distributed to the media shall be prepared by
CHARTERERS' public relations consultants and provided to OWNERS, and
CHARTERERS and OWNERS shall communicate in advance regarding such
releases, provided that CHARTERERS may select the release date.
The OWNERS shall be kept informed of the performance of the Expedition.
In any case, OWNERS actions shall in no way affect the commercial value
to the CHARTERERS or its assigns of the media literary and merchandising
rights and/or interests all of which are reserved exclusively to the
CHARTERERS.
2
<PAGE> 12
OWNERS shall have access free of charge to all non confidential still
images approved by the CHARTERERS for internal use or own advertising.
b) All press conferences or announcements of the Expedition, both before the
Expedition and after, shall be communicated among the parties in order to
allow real time broadcast.
3
<PAGE> 1
ORIGINAL
TIME CHARTER PARTY FOR OFFSHORE SERVICE VESSELS:
CODE NAME: "SUPPLY TIME 89" PART I
- --------------------------------------------------------------------------------
1. Place and date
LE HAVRE, 25TH MAY 1998
- --------------------------------------------------------------------------------
2. Disponent Owners/Place of business (full style) (Cl.1(a))
A/ LES ABEILLES INTERNATIONAL
Quai Lamande / PO Box 1351
76065 Le Havre Cedex / France
Ph: (33)2 35 19 77 85 Fax (33) 2 35 41 78 98
for the Diving Support Vessel
and
B/ TRAVOCEAN
146 rue Sainte
13007 Marseilles / France
Ph: (33)4 91 04 42 04 Fax (33) 4 91 33 85 05
For the R.O.V.
- --------------------------------------------------------------------------------
3. Charterers/Place of business (full style, addresse and telex/telefax)
(Cl.1(a))
RMS TITANIC, INC.
17, Battery Place, Suite 203
New York, New York 10004
U.S.A.
Ph (212) 558 6300 Fax (212) 482 1912
- --------------------------------------------------------------------------------
4. Vessel's name (Cl.1(a))
D.S.V. "ABEILLE SUPPORTER" and R.O.V. "ABYSSUB"
- --------------------------------------------------------------------------------
5. Date of delivery (Cl.2(a))
Between 3rd Aug 1998 and 6th Aug 1998
- --------------------------------------------------------------------------------
6. Cancelling date (Cl.2(a) & (c)
6th August 1998
23:59 LT
- --------------------------------------------------------------------------------
7. Port or place of delivery (Cl.2(a))
Mobilisation Port: Bayonne, France
Place of delivery: On RMS TITANIC wreck site
- --------------------------------------------------------------------------------
8. Port or place of redelivery/notice of redelivery (Cl.2(d))
(i) Port or place of redelivery
Redelivery: In Boston, USA
Demobilisation port: Bayonne, France
-------------------------------------------------------------------------
(ii) Number of days' notice of redelivery
2 (two) days
- --------------------------------------------------------------------------------
9. Period of hire (Cl.1(a))
Total hire 38 days firm, Bayonne / Bayonne
Departing Titanic site: 17/08 15:00 LT latest
Departing Boston: 22/08 15:00 LT latest
- --------------------------------------------------------------------------------
10. Extension of period of hire & when due (optional) (Cl.1(b))
(i) Period of extension
Total spread time 5 x 1 day at Charterers' option. Vessel to be
imperatively redelivered in Boston, dropping outward pilot latest 27/08
at 15:00 LT (See additional clause No. 40(d))
-------------------------------------------------------------------------
(ii) Advance notice for declaration of daily options (days)
2 (two) days
- --------------------------------------------------------------------------------
11. Automatic extension period to complete voyage(Cl.1(c))
(i) Voyage
Not applicable
-------------------------------------------------------------------------
(ii) Maximum extension period (state number of days)
Not applicable
- --------------------------------------------------------------------------------
12. Mobilisation charge (lump sum and when due) (Cl.2(b))
(i) Lump sum:
Included in lumpsum charter price
-------------------------------------------------------------------------
(ii) When due
See additional clause No. 40
- --------------------------------------------------------------------------------
13. Port or place of mobilisation / demobilisation (Cl.2(b)(i))
Bayonne, France
- --------------------------------------------------------------------------------
14. Early termination of charter (state amount of hire payable) (Cl.28(a))
Full lumpsum 38 days hire payable
- --------------------------------------------------------------------------------
15. Number of days notice of early termination (Cl.26(a))
2 (two) days
- --------------------------------------------------------------------------------
16. Demobilisation charge (lump sum) (Cl.2(a)
Cl.26(a)
Included in lumpsum charter price
- --------------------------------------------------------------------------------
17. Area of operation (Cl.5(a))
1/ RMS TITANiC wreck location
2/ BOSTON (USA)
Employment of vessel & ROV directed by Charterers but always within
vessel & ROV's safe and natural capacities/capabilities
- --------------------------------------------------------------------------------
18. Employment of vessel restricted to (state nature of services(s) (Cl.5(a))
Vessel: Passenger vessel up to 14 persons, surface recovery of Big Piece,
ROV support.
ROV: Assistance to recovery of Big Piece, transmission of information
from Nautile during live show, video inspection if required.
- --------------------------------------------------------------------------------
<PAGE> 2
PART I
- --------------------------------------------------------------------------------
19. Charter hire (state rate and currency) (Cl.10(a) et (d))
Round trip Bayonne / Titanic site / Boston / Bayonne (38 days), Lumpsum:
USD 950 000.00 (Nine hundred fifty thousand U.S. Dollars) Including
fuel/lubes, fresh water, catering for 14 Charterers personnel.
- --------------------------------------------------------------------------------
20. Extension hire (if agreed, state rate) (Cl.10(b))
If vessel stays on site later than 17/08 15:00 lt or/and if vessel sails
Boston later than 22/08 15:00 lt, a rate of USD 22 350.00 per day prorata
will apply.
- --------------------------------------------------------------------------------
21. Invoicing for hire & other payments (Cl.10(d))
(i) state whether to be issued in advance or arrears
In advance
--------------------------------------------------------------------------
(ii) state to whom to be issued if addressee other than stated in Box 2
As per box 2
--------------------------------------------------------------------------
(iii) state to whom to be issued it addressee other than stated in Box 3
As per box 3
- --------------------------------------------------------------------------------
22. Payments (state mode and place of payment; also state beneficiary and
bank account) (Cl.10(e))
In US Dollars by telegraphic remittance to:
Banque Nationale de Paris
475 Avenue du Prado 13008 Marseilles
Bank code: 30004
Counter: 00711
Account no. 100095/56
SWIFT: BNPAFRPPMAR
- --------------------------------------------------------------------------------
23. Payment of hire, bunker invoices & disbursements for Charterers' account
(stage maximum number of days (Cl.10(e))
See additional clause No. 40
- --------------------------------------------------------------------------------
24. Interest rate payable (Cl.10(e))
6 (six) percent per annum
- --------------------------------------------------------------------------------
25. Maximum audit period (Cl.10(f))
Not applicable
- --------------------------------------------------------------------------------
26. Meals (state rate agreed) (Cl.5(c)(i))
Included in lumpsum charter hire
- --------------------------------------------------------------------------------
27. Accommodation (state rate agreed) (Cl.5(c))
Included in lumpsum charter hire
- --------------------------------------------------------------------------------
28. Mutual Waiver of Recourse (optional, state whether applicable) (Cl.12(f))
Applicable
- --------------------------------------------------------------------------------
29. Sublet (state amount of daily increment to charter hire (Cl.17(b))
Not applicable
- --------------------------------------------------------------------------------
30. War (state name of countries) (Cl.19(e))
Not applicable
- --------------------------------------------------------------------------------
31. General average (place of settlement - Only to be filled in if other than
London) (Cl.21)
London, England
- --------------------------------------------------------------------------------
32. Breakdown (state period) (Cl.28(b)(v))
2 (two) days
- --------------------------------------------------------------------------------
33. Law and arbitration (state Cl.31(a) or 31(b) or 31(c), as agreed; if
Cl.31(c) agreed also state place of arbitration (Cl.31)
Clause 31(a) (London, England)
- --------------------------------------------------------------------------------
34. Numbers of additional clauses covering special provisions,
5 additional clauses (special provisions):
37 - 38 - 39 - 40 - 41
- --------------------------------------------------------------------------------
35. Names and addresses for notices and other communications required to be
given the Owners (Cl.28)
Mr George Tulloch, for RMS TITANIC INC.
- --------------------------------------------------------------------------------
36. Names and addresses for notices and other communications required to be
given by the Charterers (Cl.28)
Mr Jean Labescat, for "Abeilles International"
Mr Y. Durand / Mr JP Bivaud, for "Travocean"
- --------------------------------------------------------------------------------
It is mutually agreed that this contract shall be performed subject to the
conditions contained in the Charter consisting of PART I including additional
clauses and stated in Box 34 ,and PART II as well as ANNEX A, B, C as annexed to
this Charter. In the event of a conflict of conditions, the provisions of PART I
shall prevail over those of PART II and ANNEX A, B, & C to the extent of such
conflict but no further. Annex C as annexed to this Charter is optional and
shall apply only if expressly agreed and stated in Box 28.
This Charter Party is issued in 3 Originals: 1 Original for RMS TITANIC,
1 Original for LAI, 1 Original for TVO
C/P LAI-TVO/RMS TITANIC98
- --------------------------------------------------------------------------------
Signature (Owners)
For LAI & TVO, the Owners Signature (Charterers)
/s/ [ILLEGIBLE] /s/ G. H. Tulloch
- --------------------------------------------------------------------------------
<PAGE> 3
PART II
"SUPPLYTIME 89" Uniform Time Charter Party for Offshore Service Vessels
1. Period
(a) The Owners stated in Box 2 let and the Charterers stated in Box 3
hire the Vessel named in Box 4, as specified in ANNEX "A" (hereinafter
referred to as "the Vessel"), for the period as stated in Box 9 from the
time the Vessel is delivered to the Charterers.
(b) Subject to Clause 10(b), the Charterers have the option to extend the
Charter Period in direct continuation for the period stated in Box 10(i),
but such an option must be declared in accordance with Box 10(ii).
(c) The Charter Period shall automatically be extended for the time
required to complete the voyage or well (whichever is stated in Box
11(i)) in progress, such time not to exceed the period stated in Box
11(ii).
2. Delivery and Redelivery
(a) Delivery. -- Subject to sub-clause (b) of this Clause the Vessel
shall be delivered by the Owners free of cargo and with clean tanks at
any time between the date stated in Box 5 and the date stated in Box 6 at
the port or place stated in Box 7 where the Vessel can safely lie always
afloat.
(b) Mobilisation. -- (i) The Charterers shall pay a lump sum as stated in
Box 12 without discount by way of mobilisation charge in consideration of
the Owners giving delivery at the port or place stated in Box 7. The
mobilisation charge shall not be affected by any change in the port or
place of mobilisation from that stated in Box 13.
(ii) Should the Owners agree to the Vessel loading and transporting cargo
and/or undertaking any other service for the Charterers en route to the
port of delivery or from the port of redelivery, then all terms and
conditions of this Charter Party shall apply to such loading and
transporting and/or other service exactly as if performed during the
Charter Period excepting only that any lump sum freight agreed in respect
thereof shall be payable on shipment or commencement of the service as
the case may be, the Vessel and/or goods lost or not lost
(c) Cancelling. -- If the Vessel is not delivered by midnight local time
on the cancelling date stated in Box 6, the Charterers shall be entitled
to cancel this Charter Party. However, if despite the exercise of due
diligence by the Owners, the Owners will be unable to deliver the Vessel
by the cancelling date, they may give notice in writing to the Charterers
at any time prior to the delivery date as stated in Box 5, and shall
state in such notice the date by which they will be able to deliver the
Vessel. The Charterers may within 24 hours of receipt of such notice give
notice in writing to the Owners cancelling this Charter Party. If the
Charterers do not give such notice, then the later date specified in the
Owner's notice shall be substituted for the cancelling date for all the
purposes of this Charter Party. In the event the Charterers cancel the
Charter Party, it shall terminate on terms that neither party shall be
liable to the other for any losses incurred by reason of the non-delivery
of the Vessel or the cancellation of the Charter Party.
(d) Redelivery. -- The Vessel shall be redelivered on the expiration or
earlier termination of this Charter Party free of cargo and with clean
tanks at the port or place as stated in Box 8(i) or such other port or
place as may be mutually agreed. The Charterers shall give not less than
the number of days notice in writing of their intention to redeliver the
Vessel, as stated in Box 8(ii).
(e) Demobilisation. -- The Charterers shall pay a lump sum without
discount in the amount as stated in Box 16 by way of demobilisation
charge which amount shall be paid on the expiration or on earlier
termination of this Charter Party.
3. Condition of Vessel
(a) The Owners undertake that at the date of delivery under this Charter
Party the Vessel shall be of the description and classification as
specified in ANNEX "A", attached hereto, and undertake to so maintain the
Vessel during the period of service under this Charter Party.
(b) The Owners shall before and at the date of delivery of the Vessel and
throughout the Charter Period exercise due diligence to make and maintain
the Vessel tight, staunch, strong in good order and condition and,
without prejudice to the generality of the foregoing, in every way fit to
operate effectively at all times for the services as stated in Clause 5.
4. Survey
The Owners and the Charterers shall jointly appoint an independent
surveyor for the purpose of determining and agreeing in writing the
condition of the Vessel, any anchor handling and towing equipment
specified in Section 5 of ANNEX "A", and the quality and quantity of
fuel, lubricants and water at the time of delivery and redelivery
hereunder. The Owners end the Charterers shall jointly share the time and
expense of such surveys.
5. Employment and Area of Operation
(a) The Vessel shall be employed in offshore activities which are lawful
in accordance with the law of the place of the Vessel's flag and/or
registration and of the place of operation. Such activities shall be
restricted to the service(s) as stated in Box 18, and to voyages between
any good and safe port or place and any place or offshore unit where the
Vessel can safely lie always afloat within the Area of Operation as
stated in Box 17 which shall always be within Institute Warranty Limits
and which shall in no circumstances be exceeded without prior agreement
and adjustment of the Hire and in accordance with such other terms as
appropriate to be agreed; provided always that the Charterers do not
warrant the safety of any such port or place or offshore unit but shall
exercise due diligence in issuing their orders to the Vessel as if the
Vessel were their own property and having regard to her capabilities and
the nature of her employment. Unless otherwise agreed, the Vessel shall
not be employed as a diving platform.
(b) Relevant permission and licences from responsible authorities for the
Vessel to enter, work in and leave the Area of Operation shall be
obtained by the Charterers and the Owners shall assist, if necessary, in
every way possible to secure such permission and licenses.
(c) The Vessel's Space. -- The whole reach and burden and decks of the
Vessel shall throughout the Charter Period be at the Charterers' disposal
reserving proper and sufficient space for the Vessel's Master, Officers,
Crew, tackle, apparel, furniture, provisions and stores. The Charterers
shall be entitled to carry, so far as space is available and for their
purposes in connection with their operations:
(i) Persons other than crew members, other than fare paying, and for
such purposes to make use of the Vessels available accommodation
not being used on the voyage by the Vessel's Crew. The Owners
shall provide suitable provisions and requisites for such persons
for which the Charterers shall pay at the rate as stated in Box 26
per meal and at the rate as stated in Box 27 per day for the
provision of bedding and services for persons using berth
accommodation.
(ii) Lawful cargo whether carried on or under deck.
(iii) Explosives and dangerous cargo, whether in bulk or packaged,
provided proper notification has been given and such cargo is
marked and packed in accordance with the national regulations of
the Vessel and/or the International Maritime Dangerous Goods Code
and/or other pertinent regulations. Failing such proper
notification, marking or packing the Charterers shall indemnify
the Owners in respect of any loss, damage or liability whatsoever
and howsoever arising therefrom. The Charterers accept
responsibility for any additional expenses (including
reinstatement expenses) incurred by the Owners in relation to the
carriage of explosives and dangerous cargo.
(iv) Hazardous and noxious substances subject to Clause 12(g), proper
notification and any pertinent regulations.
6. Master and Crew
(a) (i) The Master shall carry out his duties promptly and the Vessel
shall render all reasonable services within her capabilities by day and
by night and at such times and on such schedules as the Charterers may
reasonably require without any obligations of the Charterers to pay to
the Owners or the Master, Officers or the Crew of the Vessel any excess
or overtime payments. The Charterers shall furnish the Master with all
instructions and sailing directions and the Master and Engineer shall
keep full and correct logs accessible to the Charterers or their agents.
(ii) The Master shall sign cargo documents as and in the form presented,
the same, however, not to be Bills of Lading, but receipts which shall be
non-negotiable documents and shall be marked as such. The Charterers
shall indemnify the Owners against all consequences and liabilities
arising from the Master, Officers or agents signing, under the direction
of the Charterers, those cargo documents or other documents inconsistent
with this Charter Party or from any irregularity in the papers supplied
by the Charterers or their agents.
(b) The Vessel's Crew if required by Charterers will connect and
disconnect electric cables, fuel, water and pneumatic hoses when placed
on board the Vessel in port as well as alongside the offshore units; will
operate the machinery on board the Vessel for loading and unloading
cargoes; and will hook and unhook cargo on board the Vessel when loading
or discharging alongside offshore units. If the port regulations or the
seamen and/or labour unions do not permit the Crew of the Vessel to carry
out any of this work, then the Charterers shall make, at their own
expense, whatever other arrangements may be necessary, always under the
direction of the Master.
(c) if the Charterers have reason to be dissatisfied with the conduct of
the Master or any Officer or member of the Crew, the Owners on receiving
particulars of the complaint shall promptly investigate the matter and if
the complaint proves to be well founded, the Owners shall as soon as
reasonably possible make appropriate changes in the appointment
(d) The entire operation, navigation, and management of the Vessel shall
be in the exclusive control and command of the Owners, their Master,
Officers and Crew. The Vessel will be operated and the services hereunder
will be rendered as requested by the Charterers, subject always to the
exclusive right of the Owners or the Master of the Vessel to determine
whether operation of the Vessel may be safely undertaken. In the
performance of the Charter Party, the Owners are deemed to be an
independent contractor, the Charterers being concerned only with the
results of the services performed.
7. Owners to Provide
(a) The Owners shall provide and pay for all provisions, wages and all
other expenses of the Master, Officers and Crew; all maintenance and
repair of the Vessel's hull, machinery and equipment as specified in
ANNEX "A"; also, except as otherwise provided in this Charter Party, for
all insurance on the Vessel, all dues and charges directly related to the
Vessel's flag and/or registration, all deck, cabin and engineroom stores,
cordage required for ordinary ship's purposes mooring alongside in
harbour, and all fumigation expenses and de-ratisation certificates. The
Owners' obligations under this Clause extend to cover all liabilities for
consular charges appertaining to the Master, Officers and Crew, customs
or import duties arising at any time during the performance of this
Charter Party in relation to the personal effects of the Master, Officers
and Crew, and in relation to the stores, provisions and other matters as
aforesaid which the Owners are to provide and/or pay for and the Owners
shall refund to the Charterers any sums they or their agents may have
paid or been compelled to pay in respect of such liability.
(b) On delivery the Vessel shall be equipped, if appropriate, at the
Owners' expense with any towing and anchor handling equipment specified
in Section 5(b) of ANNEX "A". If during the Charter Period any such
equipment becomes lost, damaged or unserviceable, other than as a result
of the Owners' negligence, the Charterers shall either provide, or direct
the Owners to provide, an equivalent replacement at the Charterers'
expense.
8. Charterers to Provide
(a) While the Vessel is on hire the Charterers shall provide and pay for
all port charges, pilotage and boatmen and canal steersmen (whether
compulsory or not), launch hire (unless incurred in connection with the
Owners' business), light dues, tug assistance, canal, dock, harbour,
tonnage and other dues and charges, agencies and commissions incurred on
the Charterers' business, costs for security or other watchmen, and of
quarantine (if occasioned by the nature of the cargo carried or the ports
visited whilst employed under this Charter Party but not otherwise).
(b) At all times the Charterers shall provide and pay for the loading and
unloading of cargoes so far as not done by the Vessel's crew, all
necessary dunnage, uprights and shoring equipment for securing deck
cargo, all cordage except as to be provided by the Owners, all ropes,
slings and special runners (including bulk cargo discharge hoses)
actually used for loading and discharging, inert gas required for the
protection of cargo, and electrodes used for offshore works, and shall
reimburse the Owners for the actual cost of replacement of special
mooring lines to offshore units, wires, nylon spring lines etc. used for
offshore works, all hose connections and adaptors, and further, shall
refill oxygen/acetylene bottles used for offshore works.
(c) The Charterers shall pay for Customs duties, all permits, import
duties
<PAGE> 4
PART II
"SUPPLYTIME 89" Uniform Time Charter Party for Offshore Service Vessels
(including costs involved in establishing temporary or permanent
importation bonds), and clearance expenses, both for the Vessel and/or
equipment, required for or arising out of this Charter Party.
9. Bunkers
Unless otherwise agreed, the Vessel shall be delivered with bunkers and
lubricants as on board and redelivered with sufficient bunkers to reach
the next bunkering stage en route to her next port of call.
10. Hire and Payments
(a) Hire -- The Charterers shall pay Lumpsum Hire for the Vessel at the
rate stated in Box 19 from the time that the Vessel is delivered to the
Charterers until the expiration or earlier termination of this Charter
Party.
(b) Extension Hire. -- If the option to extend the Charter Period under
Clause 1(b) is exercised, Hire for such extension shall, unless stated in
Box 20, be mutually agreed between the Owners and the Charterers.
(c) Adjustment of Hire. -- The rate of hire shall be adjusted to reflect
documented changes, after the date of entering into the Charter Party or
the date of commencement of employment, whichever is earlier, in the
Owners' costs arising from changes in the Charterers' requirements or
regulations governing the Vessel and/or its Crew or this Charter Party.
(d) Invoicing. -- All invoices shall be issued in the contract currency
stated in Box 19. In respect of reimbursable expenses incurred in
currencies other than the contract currency, the rate of exchange into
the contract currency shall be that quoted by the Central Bank of the
country of such other currency as at the date of the Owners' invoice.
Invoices covering Hire and any other payments due shall be issued monthly
as stated in Box 21(i) or at the expiration or earlier termination of
this Charter Party. Notwithstanding the foregoing, bunkers and
lubricants on board at delivery shall be invoiced at the time of
delivery.
(e) Payments. -- Payments of Hire and disbursements for the Charterers'
account shall be received within the number of days stated in Box 23 from
the date of receipt of the invoice. Payment shall be made in the contract
currency in full without discount to the account stated in Box 22.
However any advances for disbursements made on behalf of and approved by
the Owners may be deducted from Hire due.
If payment is not received by the Owners within 5 banking days following
the due date the Owners are entitled to charge interest at the rate
stated in Box 24 on the amount outstanding from and including the due
date until payment is received.
Where an invoice is disputed, the Charterers shall in any event pay the
undisputed portion of the invoice but shall be entitled to withold
payment of the disputed portion provided that such portion is reasonably
disputed and the Charterers specify such reason. Interest will be
chargeable at the rate stated in Box 24 on such disputed amounts where
resolved in favour of the Owners. Should the Owners prove the validity of
the disputed portion of the invoice, balance payment shall be received by
the Owners within 5 banking days after the dispute is resolved. Should
the Charterers' claim be valid, a corrected invoice shall be issued by
the Owners.
In default of payment as herein specified, the Owners may require the
Charterers to make payment of the amount due within 5 banking days of
receipt of notification from the Owners; failing which the Owners shall
have the right to withdraw the Vessel without prejudice to any claim the
Owners may have against the Charterers under this Charter Party.
While payment remains due the Owners shall be entitled to suspend the
performance of any and all of their obligations hereunder and shall have
no responsibility whatsoever for any consequences thereof, in respect of
which the Charterers hereby indemnify the Owners, and Hire shall continue
to accrue and any extra expenses resulting from such suspension shall be
for the Charterers' account.
11. Suspension of Hire
(a) If as a result of any deficiency of Crew or of the Owners' stores,
strike of Master, Officers and Crew, breakdown of machinery, damage to
hull or other accidents to the Vessel, the Vessel is prevented from
working, no Hire shall be Payable in respect of any time lost and any
Hire paid in advance shall be adjusted accordingly provided always
however that Hire shall not cease in the event of the Vessel being
prevented from working as aforesaid as a result of:
(i) the carriage of cargo as noted in Clause 5(c)(iii) and (iv);
(ii) quarantine or risk of quarantine unless caused by the Master,
Officers or Crew having communication with the shore at any
infected area not in connection with the employment of the Vessel
without the consent or the instructions of the Charterers;
(iii) deviation from her Charter Party duties or exposure to abnormal
risks at the request of the Charterers;
(iv) detention in consequence of being driven into port or to anchorage
through stress of weather or trading to shallow harbours or to
river or ports with bars or suffering an accident to her cargo,
when the expenses resulting from such detention shall be for the
Charterers' account howsoever incurred;
(v) detention or damage by ice;
(vi) any act or omission of the Charterers, their servants or agents.
(b) Liability for Vessel not Working. -- The Owners' liability for any
loss, damage or delay sustained by the Charterers as a result of the
Vessel being prevented from working by any cause whatsoever shall be
limited to suspension of hire.
12. Liabilities and Indemnities
(a) Owners. -- Notwithstanding anything else contained in this Charter
Party excepting Clauses 5(c)(iii), 7(b), 8(b), 12(g), 15(c) and 21, the
Charterers shall not be responsible for loss of or damage to the property
of the Owners or of their contractors and sub-contractors, including the
Vessel, or for personal injury or death of the employees of the Owners or
of their contractors and sub-contractors, arising out of or in any way
connected with the performance of this Charter Party, even if such loss,
damage, injury or death is caused wholly or partially by the act,
neglect, or default of the Charterers, their employees, contractors or
sub-contractors, and even if such loss, damage, injury or death is caused
wholly or partially by unseaworthiness of any vessel; and the Owners
shall indemnify, protect, defend and hold harmless the Charterers from
any and against all claims, costs, expenses, actions, proceedings, suits,
demands and liabilities whatsoever arising out of or in connection with
such loss, damage, personal injury or death.
(b) Charterers. -- Notwithstanding anything else contained in this
Charter Party excepting Clause 21, the Owners shall not be responsible
for loss of, damage to, or any liability arising out of anything towed by
the Vessel, any cargo laden upon or carried by the Vessel or her tow, the
property of the Charterers or of their contractors and sub-contractors,
including their offshore units, or for personal injury or death of the
employees of the Charterers or of their contractors and sub-contractors
(other than the Owners and their contractors and sub-contractors) or of
anyone on board anything towed by the Vessel, arising out of or in any
way connected with the performance of this Charter Party, even if such
loss, damage, liability, injury or death is caused wholly or partially by
the act, neglect or default of the Owners, their employees, contractors
or sub-contractors, and even if such loss, damage, liability, injury or
death is caused wholly or partially by the unseaworthiness of any vessel;
and the Charterers shall indemnify, protect, defend and hold harmless the
Owners from any and against all claims, costs, expenses, actions,
proceedings, suits, demands, and liabilities whatsoever arising out of or
in connection with such loss, damage, liability, personal injury or
death.
(c) Consequential Damages. -- Neither party shall be liable to the other
for, and each party hereby agrees to protect, defend and indemnify the
other against, any consequential damages whatsoever arising out of or in
connection with the performance or non-performance of this Charter Party,
including, but not limited to, loss of use, loss of profits, shut-in or
loss of production and cost of insurance.
(d) Limitations. -- Nothing contained in this Charter Party shall be
construed or held to deprive the Owners or the Charterers, as against any
person or party, including as against each other, of any right to claim
limitation of liability provided by any applicable law, statute or
convention, save that nothing in this Charter Party shall create any
right to limit liability. Where the Owners or the Charterers may seek an
indemnity under the provisions of this Charter Party or against each
other in respect of a claim brought by a third party, the Owners or the
Charterers shall seek to limit their liability against such third party.
(e) Himalaya Clause. -- (i) All exceptions, exemptions, defences,
immunities, limitations of liability, indemnities, privileges and
conditions granted or provided by this Charter Party or by any applicable
statute, rule or regulation for the benefit of the Charterers shall also
apply to and be for the benefit of the Charterers' parent, affiliated,
related and subsidiary companies; the Charterers' contractors,
sub-contractors, clients, joint venturers and joint interest owners
(always with respect to the job or project on which the Vessel is
employed); their respective employees end their respective underwriters.
(ii) All exceptions, exemptions, defences, immunities, limitations of
liability, indemnities, privileges and conditions granted or provided by
this Charter Party or by any applicable statute, rule or regulation for
the benefit of the Owners shall also apply to and be for the benefit of
the Owners' parent, affiliated, related and subsidiary companies, the
Owners' sub-contractors, the Vessel, its Master, Officers and Crew, its
registered owner, its operator, its demise charterer(s), their respective
employees and their respective underwriters.
(iii) The Owners or the Charterers shall be deemed to be acting as agent
or trustee of and for the benefit of all such persons and parties set
forth above, but only for the limited purpose of contracting for the
extension of such benefits to such persons and parties.
(f) Mutual Waiver of Recourse (Optional, only applicable if stated in Box
28, but regardless of whether this option is exercised the other
provisions of Clause 12 shall apply and shall be paramount)
In order to avoid disputes regarding liability for personal injury or
death of employees or for loss of or damage to property, the Owners and
the Charterers have entered into, or by this Charter Party agree to enter
into, an Agreement for Mutual Indemnity and Waiver of Recourse (in a form
substantially similar to that specified in ANNEX "C") between the Owners,
the Charterers and the various contractors and sub-contractors of the
Charterers.
(g) Hazardous and Noxious Substances. -- Notwithstanding any other
provision of this Charter Party to the contrary, the Charterers shall
always be responsible for any losses, damages or liabilities suffered by
the Owners, their employees, contractors or sub-contractors, by the
Charterers, or by third parties, with respect to the Vessel or other
property, personal injury or death, pollution or otherwise, which losses,
damages or liabilities are caused, directly or indirectly, as a result of
the Vessel's carriage of any hazardous and noxious substances in whatever
form as ordered by the Charterers, and the Charterers shall defend,
indemnify the Owners and hold the Owners harmless for any expense, loss
or liability whatsoever or howsoever arising with respect to the carriage
of hazardous or noxious substances.
<PAGE> 5
PART II
"SUPPLYTIME 89" Uniform Time Charter Party for Offshore Service Vessels
13. Pollution
(a) Except as otherwise provided for in Clause 15(c)(iii), the Owners
shall be liable for, and agree to indemnify, defend and hold harmless the
Charterers against, all claims, costs, expenses, actions, proceedings,
suits, demands and liabilities whatsoever arising out of actual or
potential pollution damage and the cost of cleanup or control thereof
arising from acts or omissions of the Owners or their personnel which
cause or allow discharge, spills or leaks from the Vessel, except as may
emanate from cargo thereon or therein.
(b) The Charterers shall be liable for and agree to indemnify, defend and
hold harmless the Owners from all claims, costs, expenses, actions,
proceedings, suits, demands, liabilities, loss or damage whatsoever
arising out of or resulting from any other actual or potential pollution
damage, even where caused wholly or partially by the act, neglect or
default of the Owners, their employees, contractors or sub-contractors or
by the unseaworthiness of the Vessel.
14. Insurance
(a)(i) The Owners shall procure and maintain in effect for the duration
of this Charter Party, with reputable insurers, the insurances set forth
in ANNEX "B". Policy limits shall not be less than those indicated.
Reasonable deductibles are acceptable and shall be for the account of the
Owners.
(ii) The Charterers shall upon request be named as co-insured. The Owners
shall upon request cause insurers to waive subrogation rights against the
Charterers (as encompassed in Clause 12(e)(i)). Co-insurance and/or
waivers of subrogation shall be given only insofar as these relate to
liabilities which are properly the responsibility of the Owners under the
terms of this Charter Party.
(b) The Owners shall upon request furnish the Charterers with
certificates of insurance which provide sufficient information to verify
that the Owners have complied with the insurance requirements of this
Charter Party.
(c) If the Owners fail to comply with the aforesaid insurance
requirements, the Charterers may, without prejudice to any other rights
or remedies under this Charter Party, purchase similar coverage and
deduct the cost thereof from any payment due to the Owners under this
Charter Party.
15. Saving of Life and Salvage
(a) The Vessel shall be permitted to deviate for the purpose of saving
life at sea without prior approval of or notice to the Charterers and
without loss of Hire provided however that notice of such deviation is
given as soon as possible.
(b) Subject to the Charterers' consent, which shall not be unreasonably
withheld, the Vessel shall be at liberty to undertake attempts at
salvage, it being understood that the Vessel shall be off hire from the
time she leaves port or commences to deviate and she shall remain
off-hire until she is again in every way ready to resume the Charterers'
service at a position which is not less favourable to the Charterers than
the position at the time of leaving port or deviating for the salvage
services.
All salvage monies earned by the Vessel shall be divided equally between
the Owners and the Charterers, after deducting the Master's, Officers'
and Crew's share, legal expenses, value of fuel and lubricants consumed,
Hire of the Vessel lost by the Owners during the salvage, repairs to
damage sustained, if any, and any other extraordinary loss or expense
sustained as a result of the salvage.
The Charterers shall be bound by all measures taken by the Owners in
order to secure payment of salvage and to fix its amount.
(c) The Owners shall waive their right to claim any award for salvage
performed on property owned by or contracted to the Charterers, always
provided such property was the object of the operation the Vessel was
chartered for, and the Vessel shall remain on hire when rendering salvage
services to such property. This waiver is without prejudice to any right
the Vessel's Master, Officers and Crew may have under any title.
If the Owners render assistance to such property in distress on the basis
of "no claim for salvage", then, notwithstanding any other provisions
contained in this Charter Party and even in the event of neglect or
default of the Owners, Master, Officers or Crew:
(i) The Charterers shall be responsible for and shall indemnify the
Owners against payments made, under any legal rights, to the
Master, Officers and Crew in relation to such assistance.
(ii) The Charterers shall be responsible for and shall reimburse the
Owners for any loss or damage sustained by the Vessel or her
equipment by reason of giving such assistance and shall also pay
the Owners' additional expenses thereby incurred.
(iii) The Charterers shall be responsible for any actual or potential
spill, seepage and/or emission of any pollutant howsoever caused
occurring within the offshore site and any pollution resulting
therefrom, wheresoever it may occur and including but not limited
to the cost of such measures as are reasonably necessary to
prevent or mitigate pollution damage, and the Charterers shall
indemnity the Owners against any liability, cost or expense
arising by reason of such actual or potential spill, seepage
and/or emission.
(iv) The Vessel shall not be off-hire as a consequence of giving such
assistance, or effecting repairs under sub-paragraph (ii) of this
sub-clause, and time taken for such repairs shall not count
against time granted under Clause 11(c).
(v) The Charterers shall indemnify the Owners against any liability,
cost and/or expense whatsoever in respect of any loss of life,
injury, damage or other loss to person or property howsoever
arising from such assistance.
16. Lien
The Owners shall have a lien upon all cargoes for all claims against the
Charterers under this Charter Party and the Charterers shall have a lien
on the Vessel for all monies paid in advance and not earned. The
Charterers will not suffer, nor permit to be continued, any lien or
encumbrance incurred by them or their agents, which might have priority
over the title and interest of the Owners in the Vessel. Except as
provided in Clause 12, the Charterers shall indemnify and hold the Owners
harmless against any lien of whatsoever nature arising upon the Vessel
during the Charter Period while she is under the control of the
Charterers, and against any claims against the Owners arising out of the
operation of the Vessel by the Charterers or out of any neglect of the
Charterers in relation to the Vessel or the operation thereof. Should the
Vessel be arrested by reason of claims or liens arising out of her
operation hereunder, unless brought about by the act or neglect of the
Owners, the Charterers shall at their own expense take all reasonable
steps to secure that within a reasonable time the Vessel is released and
at their own expense put up bail to secure release of the Vessel.
17. Sublet and Assignment
18. Substitute Vessel
The Owners shall be entitled at any time, whether before delivery or at
any other time during the Charter Period, to provide a substitute vessel,
subject to the Charterers' prior approval which shall not be unreasonably
withheld.
19. War
(a) Unless the consent of the Owners be first obtained, the Vessel shall
not be ordered nor continue to any port or place or on any voyage nor be
used on any service which will bring the Vessel within a zone which is
dangerous as a result of any actual or threatened act of war, war,
hostilities, warlike operations, acts of piracy or of hostility or
malicious damage against this or any other vessel or its cargo by any
person, body or state whatsoever, revolution, civil war, civil commotion
or the operation of international law, nor be exposed in any way to any
risks or penalties whatsoever consequent upon the imposition of
sanctions, nor carry any goods that may in any way expose her to any
risks of seizure, capture, penalties or any other interference of any
kind whatsoever by the belligerent or fighting powers or parties or by
any government or rulers.
(b) Should the Vessel approach or be brought or ordered within such zone,
or be exposed in any way to the said risks, (i) the Owners shall be
entitled from time to time to insure their interest in the Vessel for
such terms as they deem fit up to its open market value and also in the
Hire against any of the risks likely to be involved thereby, and the
Charterers shall make a refund on demand of any additional premium
thereby incurred, and (ii) notwithstanding the terms of Clause 11 Hire
shall be payable for all time lost including any loss owing to loss of or
injury to the Master, Officers, Crew or passengers or to refusal by any
of them to proceed to such zone or to be exposed to such risks.
(c) In the event of additional insurance premiums being incurred or the
wages of the Master and/or Officers and/or Crew and/or the cost of
provisions and/or stores for deck and/or engine room being increased by
reason of or during the existence of any of the matters mentioned in
sub-clause (a) the amount of any additional premium and/or increase shall
be added to the Hire, and paid by the Charterers on production of the
Owners' account therefor, such account being rendered monthly.
(d) The Vessel shall have liberty to comply with any orders or directions
as to departure, arrival, routes, ports of call, stoppages, destination,
delivery or in any other way whatsoever given by the government of the
nation under whose flag the Vessel sails or any other government or any
person (or body) acting or purporting to act with the authority of such
government or by any committee or person having under the terms of the
war risks insurance on the Vessel the right to give any such orders or
directions.
(e) In the event of the outbreak of war (whether there be a declaration
of war or not) between any of the countries stated in Box 30 or in the
event of the nation under whose flag the Vessel sails becoming involved
in war (whether there be a declaration of war or not) either the Owners
or the Charterers may terminate this Charter Party, whereupon the
Charterers shall redeliver the Vessel to the Owners in accordance with
PART I if it has cargo on board after discharge thereof at destination
or, if debarred under this Clause from reaching or entering it, at a near
open and safe port or place as directed by the Owners, or if the Vessel
has no cargo on board, at the port or place at which it then is or if at
sea at a near, open and safe port or place as directed by the Owners. In
all cases Hire shall continue to be paid and, except as aforesaid, all
other provisions of this Charter Party shall apply until redelivery.
(f) If in compliance with the provisions of this Clause anything is done
or is not done, such shall not be deemed a deviation.
The Charterers shall procure that all Bills of Lading (if any) issued
under this Charter Party shall contain the stipulations contained in
sub-clauses (a), (d) and (f) of this Clause.
20. Excluded Ports
(a) The Vessel shall not be ordered to nor bound to enter without the
Owners' written permission (a) any place where fever or epidemics are
prevalent or to which the Master, Officers and Crew by law are not bound
to follow the Vessel; (b) any ice-bound place or any place where lights,
lightships, marks and buoys are or are likely to be withdrawn by reason
of ice on the Vessel's arrival or where there is risk that ordinarily the
Vessel will not be able on account of ice to reach the place or to get
out after having completed her operations. The Vessel shall not be
obliged to force ice nor to follow an icebreaker. If, on account of ice,
the Master considers it dangerous to remain at the loading or discharging
place for fear of the Vessel being frozen in and/or damaged, he has
liberty to sail to a convenient open place and await the Charterers'
fresh instructions.
(b) Should the Vessel approach or be brought or ordered within such
place, or be exposed in any way to the said risks, the Owners shall be
entitled from time to time to insure their interests in the Vessel and/or
Hire against any of the risks likely to be involved thereby on such terms
as they shall think fit, the Charterers to make a refund to the Owners of
the premium on demand.
<PAGE> 6
PART II
"SUPPLYTIME 89" Uniform Time Charter Party for Offshore Service Vessels
Notwithstanding the terms of Clause 11 Hire shall be paid for all time
lost including any lost owing to loss of or sickness or injury to the
Master, Officers, Crew or passengers or to the action of the Crew in
refusing to proceed to such place or to be exposed to such risks.
21. General Average and New Jason Clause
General Average shall be adjusted and settled in London unless otherwise
stated in Box 31, according to York/Antwerp Rules, 1974, as may be
amended. Hire shall not contribute to General Average. Should adjustment
be made in accordance with the law and practice of the United States of
America, the following provision shall apply:
"In the event of accident, danger, damage or disaster before or after the
commencement of the voyage, resulting from any cause whatsoever, whether
due to negligence or not, for which, or for the consequence of which, the
Owners are not responsible, by statute, contract or otherwise, the cargo,
shippers, consignees or owners of the cargo shall contribute with the
Owners in General Average to the payment of any sacrifices, loss or
expenses of a General Average nature that may be made or incurred and
shall pay salvage and special charges incurred in respect of the cargo.
If a salving vessel is owned or operated by the Owners, salvage shall be
paid for as fully as if the said salving vessel or vessels belonged to
strangers. Such deposit as the Owners, or their agents, may deem
sufficient to cover the estimated contribution of the cargo and any
salvage and special charges thereon shall, if required, be made by the
cargo, shippers, consignees or owners of the cargo to the Owners before
delivery".
22. Both-to-Blame Collision Clause
If the Vessel comes into collision with another ship as a result of the
negligence of the other ship and any act, neglect or default of the
Master, mariner, pilot or the servants of the Owners in the navigation or
the management of the Vessel, the Charterers will indemnify the Owners
against all loss or liability to the other or non-carrying ship or her
owners insofar as such loss or liability represent loss of or damage to,
or any claim whatsoever of the owners of any goods carried under this
Charter Party paid or payable by the other or non-carrying ship or her
owners to the owners of the said goods and set-off, recouped or recovered
by the other or non-carrying ship or her owners as part of their claim
against the Vessel or the Owners, The foregoing provisions shall also
apply where the owners, operators or those in charge of any ship or ships
or objects other than or in addition to the colliding ships or objects
are at fault in respect of a collision or contact.
23. Structural Alterations and Additional Equipment
The Charterers shall have the option of, at their expense, making
structural alterations to the Vessel or installing additional equipment
with the written consent of the Owners which shall not be unreasonably
withheld but unless otherwise agreed the Vessel is to be redelivered
reinstated, at the Charterers' expense, to her original condition. The
Vessel is to remain on hire during any period of these alterations or
reinstatement. The Charterers, unless otherwise agreed, shall be
responsible for repair and maintenance of any such alteration or
additional equipment.
24. Health and Safety
The Owners shall comply with and adhere to all applicable international,
national and local regulations pertaining to health and safety, and such
Charterers' instructions as may be appended hereto.
25. Taxes
Each party shall pay taxes due on its own profit, income and personnel.
The Charterers shall pay all other taxes and dues arising out of the
operation or use of the Vessel during the Charter Period.
In the event of change in the Area of Operation or change in local
regulation and/or interpretation thereof, resulting in an unavoidable and
documented change of the Owners' tax liability after the date of entering
into the Charter Party or the date of commencement of employment,
whichever is the earlier, Hire shall be adjusted accordingly.
26. Early Termination
(a) For Charterers' Convenience. -- The Charterers may terminate this
Charter Party at any time by giving the Owners written notice as stated
in Box 15 and by paying the settlement stated in Box 14 and the
demobilisation charge stated in Box 16, as well as Hire or other payments
due under the Charter Party.
(b) For Cause. -- If either party becomes informed of the occurrence of
any event described in this Clause that party shall so notify the other
party promptly in writing and in any case within 3 days after such
information is received. If the occurrence has not ceased within 3 days
after such notification has been given, this Charter Party may be
terminated by either party, without prejudice to any other rights which
either party may have, under any of the following circumstances:
(i) Requisition. -- If the government of the state of registry and/or
the flag of the Vessel, or any agency thereof, requisitions for
hire or title or otherwise takes possession of the Vessel during
the Charter Period.
(ii) Confiscation -- If any government, individual or group, whether or
not purporting to act as a government or on behalf of any
government, confiscates, requisitions, expropriates, seizes or
otherwise takes possession of the Vessel during the Charter
Period.
(iii) Bankruptcy -- In the event of an order being made or resolution
passed for the winding up, dissolution, liquidation or bankruptcy
of either party (otherwise than for the purpose of reconstruction
or amalgamation) or if a receiver is appointed or if it suspends
payment or ceases to carry on business.
(iv) Loss of Vessel. -- If the Vessel is lost, actually or
constructively, or missing, unless the Owners provide a substitute
vessel pursuant to Clause 18. In the case of termination, Hire
shall cease from the date the Vessel was lost or, in the event of
a constructive total loss, from the date of the event giving rise
to such loss. If the date of loss cannot be ascertained or the
Vessel is missing, payment of Hire shall cease from the date the
Vessel was last reported.
(v) Breakdown. -- If, at any time during the term of this Charter
Party, a breakdown of the Owners' equipment or Vessel results in
the Owners' being unable to perform their obligations hereunder
for a period exceeding that stated in Box 32, unless the Owners
provide a substitute Vessel pursuant to Clause 18.
(vi) Force Majeure -- If a force majeure condition as defined in Clause
27 prevails for a period exceeding 15 consecutive days.
(vii) Default. -- If either party is in repudiatory breach of its
obligations hereunder.
Termination as a result of any of the above mentioned causes shall not
relieve the Charterers of any obligation for Hire and any other payments
due.
27. Force Majeure
Neither the Owners nor the Charterers shall be liable for any loss,
damages or delay or failure in performance hereunder resulting from any
force majeure event, including but not limited to acts of God, fire,
action of the elements, epidemics, war (declared or undeclared), warlike
actions, insurrection. revolution or civil strife, piracy, civil war or
hostile action, strikes or differences with workmen (except for disputes
relating solely to the Owners' or the Charterers' employees), acts of the
public enemy, federal or state laws, rules and regulations of any
governmental authorities having or asserting jurisdiction in the premises
or of any other group, organisation or informal association (whether or
not formally recognised as a government), and any other cause beyond the
reasonable control of either party which makes continuance of operations
impossible.
28. Notices and Invoices
Notices and Invoices required to be given under this Charter Party shall
be given in writing to the addresses stated in Boxes 21, 35 and 36 as
appropriate.
29. Wreck Removal
If the Vessel sinks and becomes a wreck and an obstruction to navigation
and has to be removed upon request by any compulsory law or authority
having jurisdiction over the area where the wreck is placed, the Owners
shall be liable for any and all expenses in connection with the raising,
removal, destruction, lighting or marking of the wreck.
30. Confidentiality
All information or data obtained by the Owners in the performance of this
Charter Party is the property of the Charterers, is confidential and
shall not be disclosed without the prior written consent of the
Charterers. The Owners shall use their best efforts to ensure that the
Owners, any of their sub-contractors, and employees and agents thereof
shall not disclose any such information or data.
31. Law and Arbitration
*) (a) This Charter Party shall be governed by English law and any dispute
arising out of this Charter Party shall be referred to arbitration in
London, one arbitrator being appointed by each party, in accordance with
the Arbitration Acts 1950 and 1979 or any statutory modification or
re-enactment thereof for the time being in force. On the receipt by one
party of the nomination in writing of the other party's arbitrator, that
party shall appoint their arbitrator within 14 days, failing which the
arbitrator already appointed shall act as sole arbitrator. If two
arbitrators properly appointed shall not agree they shall appoint an
umpire whose decision shall be final.
*) (b) Should any dispute arise out of this Charter Party, the matter in
dispute shall be referred to three persons at New York, one to be
appointed by each of the parties hereto, and the third by the two so
chosen; their decision or that of any two of them shall be final, and for
purpose of enforcing any award, this agreement may be made a rule of the
Court. The arbitrators shall be members of the Society of Maritime
Arbitrators, Inc. of New York and the proceedings shall be conducted in
accordance with the rules of the Society.
*) (c) Any dispute arising out of this Charter Party shall be referred to
arbitration at the place stated in Box 33 subject to the law and
procedures applicable there.
*) (d) If Box 33 in PART I is not filled in, sub-clause (a) of this Clause
shall apply.
*) (a), (b) and (c) are alternatives; state alternative agreed in Box 33
32. Entire Agreement
This is the entire agreement of the parties, which supersedes all
previous written or oral understandings and which may not be modified
except by written amendment signed by both parties.
33. Severability Clause
If any portion of this Charter Party is held to be invalid or
unenforceable for any reason by a court or governmental authority of
competent jurisdiction, then such portion will be deemed to be stricken
and the remainder of this Charter Party shall continue in full force and
effect.
34. Demise
Nothing herein contained shall be construed as creating a demise of the
Vessel to the Charterers.
35. Definitions
"Well" is defined for the purposes of this Charter Party as the time
required to drill, test, complete and/or abandon a single borehole
including any sidetrack thereof.
"Offshore unit" is defined for the purposes of this Charter Party as any
vessel, offshore installation, structure and/or mobile unit used in
offshore exploration, construction, pipelaying or repair, exploitation or
production.
"Offshore site" is defined for the purposes of this Charter Party as the
area within three nautical miles of an "offshore unit" from or to which
the Owners are requested to take their Vessel by the Charterers.
"Employees" is defined for the purposes of this Charter Party as
employees, directors, officers, servants, agents or invitees.
36. Headings
The headings of this Charter Party are for identification only and shall
not be deemed to be part hereof or be taken into consideration in the
interpretation or construction of this Charter Party.
<PAGE> 7
PART II (Continued)
Uniform Time Charter Party for Offshore Service Vessels
Additional clauses (Special provisions)
37. Liabilities (In addition to clause 12)
- It is clearly understood that Owners will act under the sole control,
supervision and entire responsibility of the Charterers or their duly authorized
representative or Project Manager.
- Owners will not be held liable for any loss or damage caused to the
retrieved Big Piece or/and artefacts either during the process of recovery
or/and their storage on board.
- Owners will not be held liable for the process of conditioning and
preserving any of the retrieved Big piece/artefacts on board of the Vessel
38. Technical conditions and clarification about Vessel and ROV (In addition
to Annex "A")
- The vessel will be fully manned for 24H/24 service operation.
- The ROV will be fully manned for a 12H/24 service operation including:
1 Superintendent
2 Technician/pilots electronic
2 Technicians/pilots Mechanic-Hydraulic
1 Technician for DGPS Positioning system
- The vessel will further feature:
o Surface Navigation System DGPS with computer and interface with DP
system DGPS.
o The necessary personnel and catering for a maximum of 14 Client's
passengers.
o The necessary gear and equipment for the surface lifting of "Big
Piece" in accordance Ifremer procedure, except for the large
sheave and the special spooling device which are to be provided by
Ifremer
- The ROV will further feature:
o All necessary preparation on the vehicle for connection of plugs
and cables provided by Ifremer
o All necessary inspection for Ifremer Safety Committee requirements
o Safety line on main umbilical with buoys to keep umbilical on
surface in case of umbilical surface breaking
o ROV junction box preparation
o ROV connector preparation
o ROV cage telemetry can and winch J box
o Modulator and demodulator for video transmission 2 channels
o Multiplex and demultiplex for audio (1 channel full duplex)
- Weather limitations
For the ROV services and recovery
o Maximum wind 25 to 30 knots
o Maximum wave or swell height: 1.5 to 2.5 m
o Maximum current: 1 knot
For the vessel during recovery of the Big Piece:
o Maximum wind: 15 to 20 knots
o Maximum waves or swell: 1 m
39. Scope of work and services
a) All preparation of the equipment (Vessel and ROV), including RMS
Titanic's equipment will be performed in Bayonne (France)
b) Vessel's scope of work:
- Before departure from Bayonne:
o Preparation of all procedure in accordance with IFREMER's
specifications for Big Piece recovery
o Coordination and clarification meeting for the assessment of the
operation(s) and agreement of procedure
o Preparation of the vessel in Bayonne in accordance with procedure
o Fitting out IFREMER's sheave and testing "A" frame
o Supply of equipment in accordance with procedure
- On Titanic wreck location
o Meals and lodging for passengers (Except extra drinks/snacks at
Bar)
o Surface recovery of the Big Piece when buoys on surface, in
accordance with procedure (Connecting towline, lifting, recovering
and storing on deck)
o Support vessel for ROV operations
o Calling at Boston for Big Piece unloading (Call expenses for
Charterers' account, Ship Agent to he appointed by Charterers
minimum one week prior to the call, see clause 8)
<PAGE> 8
PART II (Continued)
Uniform Time Charter Party for Offshore Service Vessels
Additional clauses (Special provisions)
c) ROV "Abyssub"'s scope of work
- Before departure from Bayonne:
o Preparation of all procedure in accordance with IFREMER's
specifications for Big Piece recovery
o Preparation of all procedure in accordance with IFREMER's
specifications for "Live Show" broadcasting
o Coordination and clarification meeting for the assessment of the
operation(s) and agreement of procedure
o Preparation of the ROV in Bayonne in accordance with procedure
o Supply of equipment for transmission in accordance with procedure
o Refurbishment of the umbilical winch in accordance with IFREMER's
requirement
o Inspection of the umbilical at full length
- On Titanic wreck location
o ROV services based on 12/24 hours services
40. Financial conditions (In addition to clause 10)
a) Schedule of instalments:
- USD 50 000.00 paid by Bank transfer the 11th of May 1998 for vessel/ROV
reservation
- 25 per cent of Lumpsum Charter paid by Bank transfer not later than 31st
May 1998, less USD 50 000.00
- 25 per cent of Lumpsum Charter paid by Bank transfer not later than 30th
June 1998
- 25 per cent of Lumpsum Charter paid by Bank transfer prior to Vessel's
departure from Bayonne around 29th July
- 25 per cent of Lumpsum Charter and 100 per cent of the extension hire
(If any) and additional expenses paid by Bank transfer prior to unloading
the Big Piece in Boston
b) If Charterers or their Clients use the Vessel's communication set, all
communication costs will be charged "ad cost" plus 10 per cent.
c) Any snacks, drinks and refreshments ordered out of meal time are not
included in the Lumpsum Hire and will be paid cash on board
d) The maximum extension period is of 5 x 1 day at Charterer's option. In
any event, the vessel will be redelivered at Boston (dropping outward
pilot), not later than the 27th August 1998 at 15:00 LT. Failing this, the
Owners would be entitled to claim for indemnities charged to Owners by the
current Term Charterers (French Navy) for late delivery of the Vessel at
Bayonne.
41. Miscellaneous
a) - Filming sequence clearance will be submitted to Master of the vessel
every evening for the next day
- Owners will have right to make use of Big Piece recovery pictures and
of agreed selected pictures of the diving campaign for their own
advertisement purpose, subject to the approval in writing of RMS Titanic,
Inc. Owners, including crew, shall have no other rights to photography,
film or videotape of the expedition.
b) All logos and names appearing on the vessel and equipment will remain
as they are and where they are
Part II of the C/P ends at clause No. 41 (b)
C/P LAI-TVO/RMS TITANIC98
<PAGE> 9
ANNEX "A"
"SUPPLYTIME 89" Uniform Time Charter Party for Offshore Service Vessels
C/P "LAI-TVO / RMS TITANIC98" Dated 25th May 1998
<PAGE> 10
[LETTERHEAD OF TRAVOCEAN]
ABYSSUB 5000
1 GENERAL
The Abyssub system combines the reliability of the most successful
ROV design. (the Abyssub series of International Submarine
Engineering) with the latest advancements in deep sea technology.
The result is a compact, powerful, cage deployed work vehicle,
capable of diving to an operating depth of 4000 meters (13120
feet) The system is fully integrated on board vessel Abeille
Supporter with station keeping capability and includes the
following elements which make it a fully integrated unit:
- The Vehicle
- The subs deployment cage
- The electro optic cable on its Winch
- The heave compensated deployment frame and its power pack
- The control room with the surface consoles and power box
- The 20' workshop container
As of January 1998, the Abyssub has logged over 400 Dives between
13,000 and 30 feet
2 SYSTEM PERFORMANCES AND CAPABILITIES
2.1 Capabilities
The Abyssub can be geared up to perform any of the following tasks using
either permanently installed accessories or optional tolls equipments:
- Visual inspection
Colour video
Close up inspection
High sensivity video
- Manipulative tasks
Dual arms manipulator
wire rope cutting
grinding / mechanical cutting
hydraulic connector operation
lift line attachment
- Instrumented survey
Sonar inspection
Tracking
- Special application
water jetting, light dredging / deburying
<PAGE> 11
2.2 Performance
- Maximum operating depth: 4000 m
Time required to deploy vehicle to 4000 m: 3h
Time required to recover vehicle to surface: 3h
Diving time: unlimited
- Static thrust of vehicle:
Forward : 270 Kg
Lateral : 135 Kg
Vertical (Down) : 64 Kg
- Speed of Vehicle:
Forward : 2.4 Knots
Lateral : over 1 Knot
Vertical (Down) : 1.1 Knots
Rotation : 38 Degrees / second
- Ballast / Payload : 80 Kg
3 SPECIFICATIONS
3.1 Vehicle
The vehicle itself is among the most powerful deep water ROV on the
market; its main characteristics are:
- Electro hydraulic power: 40 HP
(Fully redundant power system)
- Dimensions : 2083 mm long x 1714 mm high x 1219 mm wide
- Weight in air : 1682 Kg
- Ballast : 105 Kg of lead
- Camera pan and tilt: 1 low light S.I.T ( Black and white)
: 1 CCD colour video
- Lights : 6 x 250 Watt
- One 7 functions manipulator : maximum reach : 1.4 m
: lift at full reach : 75 Kgs
: wrist torque : 1.35 m Kg
: gripper force : 110 Kg
- One 5 functions manipulator : maximum reach : 1.3 m
: lift at full reach : 90 Kgs
: torque at jaw : 2.7 m
- One search and navigation sonar Mesotech 971
- Navigation : Auto depth, auto heading
- Structure : Aluminium and Titanium
3.2 Subsea Deployment Cage
During ascent and descent, the vehicle is docked into a side entry cage.
At operating depth, a powered drum feeds the tether out when the vehicle
exits the cage. The cage has the following characteristics:
- Weight in air : 2500 kg
- Hydraulic power : 10 Hp
- Camera : One B&W video on pan and tilt unit
- Lights : 2 x 250 watts
- Tether : 130 m of Kevlar tether
- Structure : Aluminium and Titanium
- Guiding and securing system
- Tether length counter
- Depth sensor
<PAGE> 12
3.3 Main Lift Umbilical Cable
A strong, armoured umbilical cable links the cage to the surface winch.
All signals are transmitted on fibber optics whilst power is on high
voltage electric conductors.
- Length: 4500 m
- External diameter : 31 mm
- Composition : Electro-optic fiber core with steel
armouring
- Minimum breaking strength : 55,000 Kg
- Weight in air : 3.36 Kg / m
3.4 Surface handling Frame
The vehicle and cage are deployed from the vessel's deck over board by a
hydraulically operated A frame:
- Maximum height of frame : 7.0 m
- Horizontal out-reach : 3.4 m
(Cable line to base frame side)
- Base frame dimensions : 3.Om wide x 5.8m long
- Powered by its own electro hydraulic power unit: variable flow,
34 Hp
- Weight : 14 T
- Hydro pneumatic passive heave compensator: compensation range
of 4 m with adjustable stiffness
3.5 Umbilical Winch
The winch employed for the system is a electro hydraulically
powered.
Characteristics of the winch are:
- Overall dimension : 4500 long x 3000 mm high x 2600 mm wide
- Weight of the winch : 14000 Kg
- Weight of the winch and cable : 28000 Kg
- Power required:158 KW, 325 Amps, 440 V, 60 Hz, 3 phases
- Pull and Speed : 20 Tonnes at speed variable from 0 to 30
meters/minute
- Cable monitoring features: Continuous load measurement, line
speed and line payout measurements with alarms setting.
- Fail safe brakes
- Storage capacity : 6000 m of cable
- High voltage transformer box fitted on the winch frame
- Slip Ring
- Winch Junction box
3.6 Surface Controls
The Abyssub vehicle is controlled from a dual surface console which
gathers the navigation and manipulator joysticks and all operator
switches and display panels.
The control system is based on a microprocessor aided PCM telemetry with
video display on the console of all systems parameters.
Videos from the various cameras can be channelled to any of the monitors
of the console and recorded.
The self test mode incorporates many features which make it possible to
conduct a full electronic survey of the submersible's operations.
Console dimensions (each) : 690mm deep x 1320 mm high x 560mm wide
All surface electronics are integrated into a control room.
<PAGE> 13
3.7 [illegible]
The Abyssub is designed to be a versatile heavy work vehicle capable of
operating a wide range of standard hydraulic tools.
A hydraulic intensifier can be installed in the frame enabling the use of
guillotine type 38mm cable cutter
Other tools that can be fitted at the end of the manipulators include:
- Hydraulic grinders with cutting disk
- Hydraulic rotative brush
- Large gripper
- Purpose built hydraulic tools for specific applications.
The system features a fully equipped workshop 20' container with ample
stock of spares and tools.
3.8 Options
The Abyssub can be easily fitted with extra equipment to suit client's
specific requirements. Hereafter are a few examples of additional
equipment that can be integrated or interfaced on the system:
- Additional surface video monitors
- Sample basket
- Video camera
Please find hereafter additional technical specification.
1/ MAIN UMBILICAL (Surface to Cage) Optical Fiber Qty: 7
1 for Telemetry and Sonar Down
1 for Telemetry and Sonar Up
1 for Video camera Cage 1 video camera
ROV 2 video camera
4 Spare
The 7 optical fibers in the umbilical are 8.3 / 125 graded index (SINGLEMODE)
type.
This type of fiber is used because of the low attenuation of less than 0.7 db
per Km at 1300 nm and less than 0.6 db per km at 1550 nm.
The 1218 lasers, which are required to transmit through the single mode fiber,
operate at l300nm.
2/ CAGE 1 Video camera OSPREY OE 1353 CCD MONOCHROME (see specification)
fitted on small hydraulic Pan and Tilt
2 Light 250 watt each halogen
3/ TETHER umbilical between CAGE and ABYSSUB
Length 130 meter 11 Power conductor
3 Twisted pair
3 coax
7 low-voltage conductors
Note: 2 Coax 75 Ohm and 1 twisted pair could be available
4/ VEHICLE
4-1 Payload 80 kgs maximum
4-2 Telemetry Half duplex system
4-3 Electrical power 460 VAC, 3 phase, 60 Hz
4-4 Video Camera OSPREY 0E1323 Silicon Intensifier Target
(see specification)
Video Camera OSPREY OE 1361 CCD Colour camera NTSC
(see specification)
These two camera are fitted on the same hydraulic Pan and Tilt.
4-5 Sonar MESOTECH 371
4-6 Manipulator arm 7 function Lift capacity at full extension 60 kg
5 function Lift capacity at full extension 80 kg
4-7 Light 6 x 250 watt Halogen
<PAGE> 14
ANNEX "B"
"SUPPLYTIME 89" Uniform Time Charter Party for Offshore Service Vessels
C/P "LAI-TVO / RMS TITANIC98" Dated 25th May 1998
<PAGE> 15
ANNEX "B" to Uniform Time Charter for Offshore Service Vessels [SEAL]
Code Name: "SUPPLYTIME 89" - dated 25 May 98
- --------------------------------------------------------------------------------
AGREEMENT FOR MUTUAL INDEMNITY AND WAIVER OF RECOURSE
(Optional, only applicable if stated in Box 28 In PART I)
This Agreement is made between the Owners and the charterers and is premised on
the following
(a) The Charterers and the Owners have entered into a contract or agreement
dated as above regarding the performance of work or service in connection
with the Charterers' operations off-shore ("Operations");
(b) The Charterers and the Owners have entered into, or shall enter into,
contracts or agreements with other contractors for the performance of
work or service in connection with the Operations;
(c) Certain of such other contractors have signed, or may sign, counterparts
of this Agreement or substantially similar agreements relating to the
Operations ("Signatory" or collectively "Signatories"); and
(d) The Signatories wish to modify their relationship at common law and avoid
entirely disputes as to their liabilities for damage or injuries to their
respective property or employees;
In consideration of the premises and of execution of reciprocal covenants by the
other Signatories, the Owners agree that:
1. The Owners shall hold harmless, defend, indemnify and waive all rights of
recourse against the other Signatories and their respective subsidiary
and affiliate companies, employees, directors, officers, servants,
agents, invitees, vessel(s), and insurers, from and against any and all
claims, demands, liabilities or causes of action of every kind and
character. In favour of any person or party, for injury to, illness or
death of any employee of or for damage to or loss of property owned by
the Owners (or in possession of the Owners by virtue of an arrangement
made with an entity which is not a Signatory) which injury, illness,
death, damage or loss arises out of the Operations, and regardless of the
cause of such injury, illness, death, damage or loss even though caused
in whole or in part by a pre-existing defect, the negligence, strict
liability or other legal fault of other Signatories.
2. The Owners (including the Vessel) shall have no liability whatsoever for
injury, illness or death of any employee of another Signatory under the
Owners' direction by virtue of an arrangement made with such other
Signatory, or for damage to or loss of property of another Signatory in
the Owners' possession by virtue of an arrangement made with such other
Signatory. In no event shall the Owners (including the vessel) be liable
to another Signatory for any consequential damages whatsoever arising out
of or in connection with the performance or non-performance of this
Agreement, including, but not limited to, loss of use, loss of profits,
shut-in or loss of production and cost of insurance.
3. The Owners undertake to obtain from their insurers a waiver of rights of
subrogation against all other Signatories in accordance with the
provisions of this Agreement governing the mutual liability of the
Signatories with regard to the Operations.
4. The Owners shall attempt to have those of their sub-contractors which are
involved in the Operations become Signatories and shall promptly furnish
the Charterers with an original counterpart of this Agreement or of a
substantially similar agreement executed by its subcontractors.
5. Nothing contained in this Agreement shall be construed or held to deprive
the Owners, or the Charterers, or any other Signatory as against any
person or party, including as against each other, of any right to claim
limitation of liability provided by any applicable law, statute, or
convention, save that nothing in this Agreement shall create, any right
to limit liability. Where the Owners or the Charterers or any other
Signatory may seek an indemnity under the provisions of this Agreement as
against each other in respect of a claim brought by a third party, the
Owners or the Charterers or any other Signatory shall seek to limit their
liability against such third party.
6. The Charterers shall provide the Owners with a copy of every counterpart
of this Agreement or substantially similar agreement which is executed by
another Signatory pertaining to the Operations, and shall, in signing
this, and in every counterpart of this Agreement, be deemed to be acting
as agent or trustee for the benefit of all Signatories.
7. This Agreement shall inure to the benefit of and become binding on the
Owners as to any other Signatories on the later of the date of execution
by the Owners and the date of execution of a counterpart of this
Agreement or a substantially similar agreement by such other Signatory
pertaining to the Operations.
8. Any contractor, consultant sub-contractor, etc., performing work or
service for the Charterers or another Signatory in connection with the
Operations which has not entered into a formal contract for the
performance of such work or service may nevertheless become a Signatory
by signing a counterpart of this Agreement or a substantially similar
agreement which shall govern, as to the subject of this Agreement, the
relationship between such new Signatory and the other Signatories and
also by extension its relations with the Charterers.
9. This Agreement may be executed in any number of counterparts or
substantially similar agreements as necessary but all such counterparts
shall together constitute one legal instrument.
<PAGE> 16
ANNEX "B" to Uniform Time Charter Party for Offshore Service Vessels [SEAL]
Code Name: "SUPPLYTIME 89" - dated 25th May 98
- --------------------------------------------------------------------------------
INSURANCE
Insurance policies (as applicable) to be procured and maintained by the Owners
under Clause 14:
(1) Marine Hull Insurance. -- Hull and Machinery Insurance shall be provided
with limits equal to those normally carried by the Owners for the Vessel.
(2) Protection and Indemnity (Marine Liability) Insurance. -- Protection and
indemnity or Marine Liability insurance shall be provided for the Vessel
with a limit equal to the value under paragraph 1 above or U.S. $5
million, whichever is greater, and shall include but not be limited to
coverage for crew liability, third pasty bodily injury and property
damage liability, including collision liability, lowers liability (unless
carried elsewhere).
(6) Such other insurances as may be agreed.
<PAGE> 1
RMS TITANIC, INC.
17 BATTERY PLACE
NEW YORK, NEW YORK 10017
(212) 558-6300
TELECOPIER COVER PAGE
SEND TO:
NAME: Reinhard Esser Fax Number: 011-49-211-329306
FROM: Allan H. Carlin Date Sent: August 4, 1998
TOTAL NUMBER OF PAGES INCLUDING THIS SHEET: 2
CONFIDENTIALITY NOTICE: THE INFORMATION CONTAINED IN AND ACCOMPANYING THIS
TELEFACSIMILE MESSAGE IS PRIVILEGED AND CONFIDENTIAL AND IS INTENDED ONLY FOR
THE USE OF THE INDIVIDUAL(S) AND/OR ENTITY(IES) NAMED ABOVE. IF YOU ARE NOT THE
INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY UNAUTHORIZED DISCLOSURE,
COPYING, DISTRIBUTION OR TAKING OF ANY ACTION IN RELIANCE ON THE CONTENTS OF
THE TELECOPIED MATERIAL IS STRICTLY PROHIBITED AND REVIEW BY ANY INDIVIDUAL
OTHER THAN THE INTENDED RECIPIENT SHALL NOT CONSTITUTE WAIVER OF THE
ATTORNEY-CLIENT PRIVILEGE. IF YOU HAVE RECEIVED THIS TRANSMISSION IN ERROR,
PLEASE IMMEDIATELY NOTIFY US BY TELEPHONE TO ARRANGE FOR RETURN OF THE
MATERIALS. THANK YOU.
COMMENTS: Rainer -- In furtherance of our discussion, I am writing to confirm
our understandings that RMST will be paid the following sums from the Hamburg
exhibition for the period from May 1, 1998 through September 30, 1998:
1. Two-thirds (2/3) of all ticket revenues (less applicable taxes) in excess
of a monthly operating budget of 400,000 DM; provided, however, in the event
that marketing expenses for a monthly period are less than 50,000 DM, then RMST
shall be paid two-thirds (2/3) of the difference between the actual marketing
expenditures and 50,000 DM. Please provide me with documentation evidencing the
marketing expenses for the months of May, June and July.
2. Twenty (20%) of the gross merchandise sales (exclusive of catalogue sales),
less applicable taxes.
3. Fifth (50%) of the gross catalogue sales, less applicable taxes and the
costs per unit for printing the catalogue. For purposes of the foregoing, if
the costs for printing 120,000 catalogues was 120,000 DM, then the cost per unit
shall be 1 DM.
4. The costs for refurbishing the Hamburg exhibition, as reflected by invoices
sent on your behalf and delivered to RMST on July 31st, in the approximate
amount of 325,000 shall be shared by the parties on a two-thirds/one-third
basis, with two-thirds of such costs to be deducted from RMST's share of July
revenues. It is understood and agreed that RMST shall be the sole owner of all
display cases or any other exhibit that can be deinstalled and moved to another
venue, and which was the subject of refurbishment as aforesaid.
5. RMST shall pay two-thirds (2/3), or up to $150,000 US, whichever is less,
of the costs of deinstalling and moving all of the exhibitry and related items,
and artifacts, from the Hamburg venue to the Zurich venue. Such costs shall be
deducted and held in reserve from revenues due to RMST from the Hamburg
exhibition for the months of August and September 1998 at the rate of $75,000
per month. If such deinstallation and moving expenses are less than $150,000,
RMST shall receive two-thirds (2/3) of any such savings.
<PAGE> 2
6. RMST shall receive two-thirds (2/3) of the proceeds from the sale of the
catering equipment utilized in the Hamburg exhibition, with such sale to occur
as soon as practical after the end of the Hamburg exhibition.
7. Your company will indemnify and hold RMST harmless from any and all
liability related to the operation of the Hamburg exhibtion, including but not
limited to claims for services rendered by LP3 Conservation or any other third
party.
8. You agree to the terms and conditions of Angelo Stamera's fax to me of
August 3rd and my reply thereto of August 4th, copies of both of which you
hereby acknowledge you have received.
9. Except as expressly amended by this letter, the terms and conditions set
forth in the agreements between your companies and RMST dated April 15, 1996
and April 15, 1998 respectively, shall remain in full force and effect.
Please signify your agreement to the foregoing by countersigning this fax
in the space provided below, and returning the same to me via fax. Thank you.
AHC.
Agreed to
TITANIC EXHIBITION GmbH
BY: s/
--------------------
2
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