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SHIPMENT AGREEMENT
SERVICE CONTRACT NUMBER 2019-000 37
This Service Agreement is made and will be effective as of the 1911 day of February 2019,
between The Puerto Rico Department of State, a Government entity with existing and legal
personality under Article IV, Section 6 of the Constitution of Puerto Rico, named in this contract as
CHARTERER, whose street address is Old San Juan, San José Street Number 200 and city is San
Juan, Puerto Rico, which is here represented by Acting Secretary of State, María A. Marcano De
León, of legal age, married and resident in Toa Alta, Puerto Rico.
AND-
EZ Shipping Limited, a legally operating logistics company that provides cargo and freight services,
named in this contract as VESSEL OWNER, with postal address: P.O. Box 4534, Road Town,
Tórtola, British Virgin Islands, VG1110 and physical address at 2nd Floor Hamm Building, Port-
Purcell Roundabout, Blackbourne Highway, Road Town, Tórtola, British Virgin Islands and
represented in this agreement by Clyde Chalwell, Owner, of legal age, married and resident in
Tórtola, British Virgin Islands.
In consideration of the mutual representations, warranties, terms and conditions contained herein,
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, the parties in possession and enjoyment of their civil rights and
having the legal capacity to this agreement, freely and voluntarily
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119(11
1,12 AGREE
VESSEL OWNER agrees to próvido the contracted services to CHARTERER following the terms
#11./ and conditions stated in the service agreement signed by both parties. IN CONSIDERATION OF the
matters stated aboye and in consideration of mutual benefits set forth in this agreement, the parties
agree on the points as follows:
ARTICLE 1. EMPLOYMENT AND SERVICES OF VESSEL
During each CHARTER TERM, the VESSEL shall be employed exclusively for CHARTERER use in
the performance of various tasks as directed by CHARTERER. Such services shall include, but not
be limited to, packing, transportation and brokerage along with the implied ancillary services involved
in the international (door to door, door to port, port to door or port to port) shipment of property as
agreed on within the confines of the contract. VESSEL OWNER will provide stated services under
stated terms and conditions.
ARTICLE 2. The inventory of the goods to be transported will be part of this contract. (Annex 1.) The
VESSEL shall be available and at CHARTERER's disposal for operation twenty-four (24) hours per
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day. The VESSEL shall not be used for any purpose other than performance of services during the
CHARTER TERM.
ARTICLE 3. PERFORMANCE OF VOYAGES
1) During the employment under this CHARTER, the VESSEL OWNER or its designated master
shall perform all voyages without delay. VESSEL OWNER or its designated master shall load, stow,
and trim the VESSEL. The decision to proceed or not proceed on a trip in the face of adverse or
changing weather will be of the VESSEL OWNER.
2) VESSEL OWNER shall promptly and efficiently receive, ship and deliver safely, within
CHARTERER established schedules and without delay, the goods entrusted to it hereunder.
3) VESSEL OWNER will receive the goods in San Juan, Puerto Rico at Port 9 or 10 on Wednesday
20, February 2019 and will deliver them to Puerto Cabello, Venezuela on or before Friday 23,
February 2019.
ARTICLE 4. OPERATION IN COMPLIANCE WITH LAW
A. VESSEL OWNER warrants that it has the right to CHARTER the VESSEL to CHARTERER, that
the VESSEL is entitled to perform the services under all applicable law (including having all
documentation that may be required to perform the services in accordance with applicable law) and
exercise due diligence to deliver and maintain the VESSEL in a seaworthy condition.
B. The VESSEL shall be operated, manned and maintained by VESSEL OWNER at all times during
the term of this CHARTER in accordance with all applicable state and federal laws, rules and
regulations, including (but not limited to) life saving requirements. The VESSEL OWNER warrants to
exercise good faith in the performance of each and every obligation under this CHARTER.
C. VESSEL OWNER shall be responsible for paying any civil, criminal, or administrative fines,
citations, or penalties that VESSEL OWNER may incur as a result of VESSEL OWNER'S violation of
any laws, rules, or regulations during the term of this CHARTER.--- ---------- ------
D. VESSEL OWNER shall indemnify and hold CHARTERER harmless from any liability for personal
injury, death, or property damage attributable to VESSEL OWNER'S intentional nnisconduct
constituting a violation of state or federal criminal law.
The vessel that will be used to provide the service is the Midnight Stone, built in 1982, with registry
number 2439. Its owner and operators neme is Midnight Marine Holdings Limited. Capacity and
operational range of the vessel (Vessel's particulars) will be included as Annex 2.
VESSEL OWNER will transport the goods in three containers with wheels and each container being
of 45 feet long. The Vessel shall be delivered at the commencement of the Charter Term, fully
tanked with fuel, hydraulic fluid, lubricated, manned, provisioned and ready in al respect to perform
services as required by this CHARTER.
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ARTICLE 6. MANNING REQUIREMENTS
A. VESSEL OWNER shall at ahl times man the VESSEL with a sufficient number of competent and
properly licensed crew and/or deckhands trained and experienced in the operation of the VESSEL in
the waters in which the VESSEL is to operate under this CHARTER. The specific number of crew
shall be two (2) crew members (captain and one crew) or more for vessels under 41 feet in length,
and at least three (3) crew members (captain and 2 crew) for vessels 41 feet or greater in length.
VESSEL OWNER shall cause the crew of the VESSEL to carry out their duties with due care and
workmanship and the utnnost dispatch and diligence. VESSEL OWNER shall be responsible for
properly receiving and stowing ahl cargo, including maintenance of the proper trim and draft of the
VESSEL. Cargo loading and unloading operations shall be under the supervision and control of
VESSEL OWNER. VESSEL OWNER and crew shall operate the VESSEL in such a way as to not
cause unreasonable risk or avoidable damage to any personnel or cargo,
B. VESSEL OWNER warrants that the crew to be provided by VESSEL OWNER shall meet legal
manning requirements in accordance with ahl applicable law for uses and purposes of the VESSEL
required hereunder and as more particularly stated in ARTICLE 1. The VESSEL'S crew shall be
VESSEL OWNER'S employees at all times. VESSEL OWNER shall pay all wages, fringe benefits,
applicable taxes, expenses, fees, and transportation costs required for the VESSEL'S crew.
C. The VESSEL shall be loaded and unloaded at any dock, berth, or place that CHARTERER may
direct, as approved by VESSEL OWNER, which approval shall not be unreasonably withheld.
VESSEL OWNER shall assist CHARTERER in locating and selecting the docks and landings
suitable to accomplish the safe loading and unloading of passengers and cargo.
E. If the VESSEL is lost or becomes a constructive total loss, HIRE shall cease at 11:59 PM of the
day of VESSEL loss or constructive total loss. If the VESSEL is missing, HIRE shall be suspended
as of 11:59 PM on the day when the VESSEL was last heard from and until the VESSEL'S safety
has been established, unless loss of contact is deemed to have occurred through no fault of
VESSEL OWNER.
F. Any HIRE paid for in advance is to be adjusted by refund or deduction from futura payments for
any offHIRE or suspension during the period for which payment was made. ------- --------
G. If the VESSEL is off-HIRE for a period of time exceeding twenty-four (24) hours for any of the
events referred to in ARTICLE 12, CHARTERER may terminate this CHARTER at its sole option if
VESSEL OWNER is not making best efforts to return to a safe harbor.
H. Notwithstanding the aboye, should EZ Shipping Limited's vessel encounter any hardships as a
result of its presence in the vicinity of Puerto Cabello, Venezuela, or any port of waters recognized
as those belonging to the country of Venezuela, including but not limited to seizure or arrest of the
vessel, detention of the vessel by Venezuelan or other authorities, a taking of the vessel or its cargo
by pirates, or others subject to an act of civil unrest, war, civil commotion, strike, or similar unrest,
DOS shall act with immediate and appropriate support and financial resources to restore peaceful
possession of the vessel, and its cargo still onboard, to EZ Shipping Limited. If the vessel is seized,
arrested, or detained by a lawful-government proceeding, but due to no fault of EZ Shipping Limited,
DOS hereby pledges and guarantees to intervene on EZ Shipping Limited's behalf by posting a bond
of sufficient amount to release the vessel from arrest, seizure, or detention, and return it to EZ
Shipping Limited. If the vessel is detained, taken, seized or commandeered as a result of any
unlawful act, including those listed in this section, DOS hereby pledges and guarantees to indemnify
EZ Shipping for its losses and damaged incurred as a result thereof, including but not limited to
paying for ahl uninsured losses, replacement of the vessel, or an amount sufficient to replace the
vessel an its freight then pending at the time of loss. DOS also agrees to guaranty and indemnify EZ
Shipping Limited for ahl damages associated with any delay caused by any scenario described in this
section. In any event that the vessel is held or delayed in Venezuela for a period of more than one
day, CHARTERER shall pay the sum of $25,000 per day of delay or detention to VESSEL OWNER.
ARTICLE 13. INSURANCE
A. VESSEL OWNER confirms that it will maintain in place any insurance policies it is carrying as of
the date innmediately prior to entering into this CHARTER or that it routinely cardes for its usual
operations.
B. The insurance coverage shall remain in effect during the CHARTER TERM or the VESSEL is on
HIRE for oil spill response. The time of coverage shall be from díspatch until termination of dispatch
by either the VESSEL OWNER or CHARTERER.
IP
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C. Insurance coverage may be activated for VESSELS that choose to travel to a remote site the day
prior to an exercise or drill with prior approval by the CHARTERER. The VESSEL will only be
considered onHIRE for the purpose of insurance and will not receive any connpensation.
D. In the event of any happening that may result in a claim against the coverage, prompt notice
thereof shall be given to the party first aware of such claim in order to afford both parties an
immediate opportunity to investigate the facts and circumstances giving rise to the potential claim.
E. The parties understand and agree that the insurance coverage is more particularly described in
the insurance policies, the terms, conditions and exclusions of which shall control.
F. VESSEL OWNER warrants that during the term of this CHARTER that as to the insurance
described in Paragraph A of this Clause 13, it shall pay ahl premiunns to keep such insurance policies
in full force and effect on the ternns and conditions more particularly described in such policies and
will not modify, amend or otherwise agree to any reduction in coverage afforded under the policies. -
-G. If VESSEL OWNER has a claim against CHARTERER or has Notice of any claim(s) for which
CHARTERER is or could be accountable;
1. VESSEL OWNER will exercise good faith and prudent management of ahl claims, including third
party claims, and will not defend or settle third-party claims without CHARTERER'S knowledge and
prior written consent.
H. In the event VESSEL OWNER's cost for insurance as provided for hereunder is, by virtue of the
SERVICES being provided hereunder, in excess of that normally paid by VESSEL OWNER for its
standard coverage, then CHARTERER agrees to pay the cost over and aboye that normally incurred
by VESSEL OWNER for its standard coverage. VESSEL OWNER shall advise CHARTERER of
such excess cost before incurring same and shall document the amount of such cost it is clainning
for. Nothing herein shall prevent CHARTERER from taking out insurance for any risks it may deem
appropriate but nothing herein shall require CHARTERER to do so.
any non-crew member who would interfere with the VESSEL OWNER'S performance of SERVICES
under this CHARTER. If the VESSEL OWNER allows on board the VESSEL any persons who are
not crew members, or CHARTERER employees, or business invitees, the VESSEL OWNER shall
be solely responsible for any liability for any injury to or death to any such person attributable to that
person's presence on board the VESSEL. In no event shall CHARTERER be liable for any expenses
resulting from the injury to or death of any person allowed on board without CHARTERER'S prior
authorization.
ARTICLE 17. VESSEL OWNER IS INDEPENDENT
A. VESSEL OWNER and its employees and any approved Subcontractors and their employees are
independent contractors and are not employees, partners, or joint ventures with CHARTERER.
VESSEL OWNER and Subcontractors and their respective employees will not represent
CHARTERER in performance of SERVICES under this CHARTER, or engage in any conduct that
would imply that VESSEL OWNER and Subcontractors and their respective employees, represent
the CHARTERER.
B. VESSEL OWNER is responsible for the manner, means and methods of performing SERVICES
under this CHARTER.
C. VESSEL OWNER acknowledges and understands that as an independent contractor, VESSEL
OWNER and its employees and Subcontractors and their employees are not eligible for any
employee benefits under any piens maintaíned by CHARTERER, including, but not limited to, the
CHARTERER Savings and Investment Plan, Pension Plan, Sick Pay Plan, Long Term Disability
Insurance Plan, Voluntary Personal Accident Insurance Plan, Severance Plan, Group Life Insurance
Plan, Dental Plan, Occupational Death Plan, Business Travel Plan and Medical Plan.
E. VESSEL OWNER will indemnify, defend and hold CHARTERER and its respective employees
and agents harmless from and against any and all claims, demands, actions, losses, expenses
and/or liabilities resulting from or related to:
1. Any claim, demand, and/or determination that VESSEL OWNER, its employees and/or
Subcontractors and their employees are not independent contractors in connection with the
performance of SERVICES under this CHARTER, including, but not limited to, any claims or
liabilities for regular or overtime wages, salaries, taxes, contributions, and/or assessments; and/or
2. Any claim, demand, and/or determination that VESSEL OWNER, its employees and/or
Subcontractors and their employees are entitled to benefits in connection with the performances of
SERVICES under this CHARTER under any employee benefit piens maintained by CHARTERER;--
3. Any claim, demand, and/or determination that VESSEL OWNER'S employees or Subcontractors'
employees are entitled to additional compensation or benefits as a result of VESSEL OWNER'S
employment policies and practices; and/or
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4. Any clainn, demand, and/or determination that VESSEL OWNER'S employees or Subcontractors'
employees are entitled to additional compensation or benefits, of whatever kind or character, or
damages, of whatever kind or character, based on whole or in part upon theories that they are direct,
dual, loaned, borrowed, and/or co- employees of CHARTERER, in addition to being employees of
VESSEL OWNER or Subcontractor.
F. Should VESSEL OWNER or Subcontractor assume the defense of CHARTERER pursuant to
Paragraph E, CHARTERER shall also be entitled to separate defense and representation of its
interests through counsel acceptable to CHARTERER. ---------- ----------- -------- ----------- -----
ARTICLE 18. TERMS OF AGREEMENT
1) The terms of this agreement will start on the date of this agreement and will remain in full force
and effect until termination through evident completion of contracted services. Both parties to the
agreement agree on each and every clause of the contract and also agree to do everything
necessary to ensure that the terms and conditions of this agreement take effect.
2) CHARTERER understands that in the event that the items are being shipped as consolidated
freight, then there might be a third party consolidator and the consolidator will be responsible for the
items until they arrive at their destination. In such an event, EZ Shipping Limited will have no control
over the movement of the items while they are in the care/possession of the consolidator or any
state agency.
ARTICLE 19. CHOICE OF LAW AND FORUM
The rights and obligations of the Partes to this CHARTER including ahl matters of construction,
validity and performance, shall in ahl respects be governed and enforced in accordance with the
general maritime laws of the United States. In the event, but only in the event, the maritime laws of
the United States do not apply, the laws of Puerto Rico shall govern.
ARTICLE 20. CONFLICT OF INTEREST: the State Department also expressly acknowledges its
duty not to accept any non-pathetic professional interest in any matter that results in a conflict of
interest between the parties to this contract. According to the aboye, the VESSEL OWNER agrees
not to represent interests contrary to the Government of Puerto Rico, its agencies, corporations and
municipalities. The VESSEL OWNER recognizes that this contract does not make him agent,
representative or employee of the State Department for any purpose. Parties certify that no official
or ennployee of each of the parties or a member of their individual units have directly or indirectly
economic interest in this agreement and that no official or employee of the Executive Branch has
any economic interest in the profits or benefits of this agreement, according to provisions of Articles
3.3 (d) and (e) of the Government Ethics Law of Puerto Rico.
ARTICLE 21. ASSIGNMENT/SUBCONTRACTING
A. VESSEL OWNER will not assign any of its rights or delegate any of its obligations under this
CHARTER without prior written approval from CHARTERER. CHARTERER'S ápproval of any
assignment, subcontract or delegation will not relieve VESSEL OWNER of any responsibility under
this CHARTER.
B. VESSEL OWNER shall not assign any rights or delegate any obligations hereunder without
CHARTERER'S prior written approval, which shall not be unreasonably withheld. Any such
unauthorized assignment shall be void. CHARTERER may assign this CHARTER to third parties
specifically including any of its respective affiliates or a response action contractor.
ARTICLE 22. WAIVER
If CHARTERER fails to enforce any right or remedy available under this CHARTER, that failure will
not be construed as a waiver of any right or remedy. A waiver of any claim, demand, right or remedy
based on the breach of any provision of this CHARTER will not be construed as a waiver of any
other claim, demand, right or remedy based on a subsequent breach of the same or any other
provision.
"Under penalty of absolute nullity, I certify that no public servant of the State Department, is a
party to or has an interest in the profits or benefits that the product of this invoice, and to be a
party to or have an interest in the profits or benefits of resulting from the contract, under this
invoice a prior dispensation has been issued. The sole consideration to furnish the
contracted goods or services subject of the contract is the payment agreed upon with the
authorized representative of the government entity. The amount that appears in the invoice is
fair and correct. The work has been performed, the products have been delivered and the
services rendered, and no payment has been receive for them.
The procedure for compensation shall be made upon the presentation of the invoice (s) certified by
the Secretary of State, the Deputy Secretary of State or the Assistant Secretary of State as well as
any other representative authorized by the Secretary of State. DOS may withhold payment from the
owner vessel for services rendered up to the twenty nine percent (29%) provided by Law No. 1 of
2011 "Internal Revenue Code for a New Puerto Rico" in accordance with the regulations appended
by the Secretary of the Treasury. If the vessel owner produces the corresponding relief certificate the
Department of Treasury authorizing the retention of another percent, then it will be an amount to be
retained,
Repister of Government Suppliers in the Portal of Electronic Pavments of the Government of
Puerto Rico: Act No. 103 of May 25, 2006, known as the Law to Enforce the Fiscal Reform of the
Government of Puerto Rico, as amended, provides in Article 20 that it will be public policy of the
Government of Puerto Rico, to encourage the development of technology by encouraging that all
disbursement of public funds be made through electronic methods. In compliance with these
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provisions of law and as part of the transition to the new Accounting System of the Government of
Puerto Rico, it is required that ahl Suppliers of government agencies register in the electronic system
to receive disbursements through electronic methods. It should be noted that the registration
process in the Electronic Payment Portal is compulsory and full responsibility of the contractor.
Payment of invoices cannot be made until the contractor has completed the process and registration
of the invoice in the Online Invoice Registration System through the Line of the Internet page of the
Department of the Treasury at the link http: // www.hacienda.pr.gov/sobre-hacienda/hacienda-virtual.
ARTICLE 30. NOTICE
Ahl notices, requests, demands or other communications required or permitted by the terms of this
agreennent will be in writing and sent to the concerned party to the agreement in time and ahl the
notices shall be sent to each party as addressed below:
EZ Shipping Limited
P.O. Box 4534
Road Town, Tortola VG1110, British Virgin Islands
Mobile: 284-541-9038
Email: clyde.chalwellaez-shipping.com and zoe.bickerton@ez-shipping.com
Department of State
Old San Juan, San José Street Number 200
San Juan, Puerto Rico
Postal address:
PO BOX 9023271
San Juan, Puerto Rico 00902-3271
IN WITNESS WHEREOF the parties have duly executed this Service Agreement on 19th day of
February, 2019.