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States or any of his duly authorized representatives shall have access to and the right to examine any pertinent books, documents, papers and records of the Underwriting Agent or of the Participating Members thereof in the performance of and involving transactions related to this Agreement.

7. Act only as agent. The Underwriting Agent shall act only in the capacity of agent for the Administrator as principal, in the performance of the functions provided for hereunder. The Underwriting Agent shall have no authority other than as provided in this Agreement and in the rules, regulations and instructions issued to it by the Administrator under and pursuant to this Agreement. The Underwriting Agent may accompany Its signature in all binders and policies countersigned by it hereunder with

statement that, in countersigning such binders and policies, it act solely under the powers conveyed to it by the Administrator and that it does not thereby warrant Its authority to accept applications for insurance or its authority to countersign, nor the authority of the Administrator to issue such binders and policies.

8. Special circumstances-(a) Reimbursement of taxes and fees. In the event that the Underwriting Agent or any participating Member or Members thereof, after giving notice to the Administrator, shall be compelled to pay to the United States, Its territories or possessions, or to any State of the United States or political subdivision thereof, or to any foreign country or political subdivision thereof, any tax (excepting Income taxes of every nature) or fee or interest or penalty relating thereto claimed to be due by reason of the business transacted pursuant to this Agreement and which would not have been payable except for the activities of the Underwriting Agent or any Member or Members thereof hereunder, the Administrator shall reimburse the Underwriting Agent and any Participating Member or Members therefor and for any special expenses necessarily incurred in connection therewith.

(b) Indemnification. If any legal suit or proceeding (whether or not based on negllgence) is brought against the Underwriting Agent or any participating Member or Members thereof on account of anything done or not done, by the Underwriting Agent or any participating Member or Members thereof or the Administrator, in connection with the iss'iance or non-issuance or cancellation of Insurance or the acceptance or denial of applications for binders or policies of insurance on behalf of the Administrator or the payment or non-payment of claims for loss or return premium arising hereunder (including, without in any way limiting the foregoing, anything done or not done pursuant to any rules, regulations or instructions of the Administrator or anything done or not done in conflict with or because of any limitation on the powers of the Administrator), the Administrator shall, upon due notice and at the expense of the United

States, defend any such proceeding. If, in or as a result of any such legal suit or proceeding, the Underwriting Agent or any Participating Member or Members thereof be compelled or required to make any payment or incur any expense, the Administrator shall reimburse the Underwriting Agent or any Participating Member or Members thereof for the amount thereof; provided always that the Administrator shall not be obligated to make any such reimbursement unless, in connection with the action complained of, the Underwriting Agent shall have complied with the standard of performance required thereunder. In any of the foregoing cases, the Underwriting Agent shall render to the Administrator such reasonable cooperation and assistance as the Administrator may require.

9. Effective date, amendment, termination. This Agreement shall become effective as of the date of its execution by the Administrator and shall continue in force until terminated. This Agreement may be terminated, modified or amended at any time by mutual written consent. Once this Agreement becomes effective, it shall continue in force until terminated by mutual written consent or by either party, giving at least thirty (80) days' written notice by registered mail to the other party, stating the effective date and time on which this Agreement shall terminate. Such termination shall not affect the obligations of the parties hereto with respect to any binders or policies of Insurance Issued or expenditures incurred prior to the effective date of such termination.

10. No commission or contingent fee. The Underwriting Agent warrants that no person or selling agency has been employed or retained to solicit or secure this contract upon an agreement or understanding for a commission, percentage, brokerage, or contingent fee, excepting bona fide employees or bona fide established commercial or selling agencies maintained by the Underwriting Agent for the purpose of securing business. For breach

or

violation of this warranty the Administrator shall have the right to annul this contract without liability or in his discretion to deduct from the contract price or consideration the full amount of such commission, percentage, brokerage, or contingent fee.

11. No discrimination. In connection with the performance of work under this contract, the Underwriting Agent agrees not to discriminate against any employee or applicant for employment because of race, color, creed, or national origin; and further agrees to insert the foregoing provision in all subcontracts hereunder except subcontracts for standard commercial supplies or for raw materials.

12. No member or delegate. No member of or Delegate to Congress, or Resident Commissioner, shall be admitted to any share or part of this contract, or to any benefit that may arise therefrom; but this provision

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(Assistant General Counsel, Maritime Administration) I,

certify that I am the duly chosen, qualified, and acting Secretary of

------, a party to this Agreement, and, as such, I am the custodian of its offcial records and the minute books of its governing body; that

-----, who signed this Agreement on behalf of said association, was then the duly qualified

of said association; that said officer amixed his manual signature to said Agreement in his official capacity as said oficer for and on behalf of said association by authority and direction of Its governing body duly made and taken; that said Agreement is within the scope of the lawful powers of this association.

shall not be construed to extend to this contract if made with a corporation for its general benefit.

13. Renegotiation. This contract shall be subject to any act of the Congress, whether heretofore or hereafter enacted and to the extent indicated therein, providing for the renegotiation of said contract and shall be deemed to contain all of the provisions required by any such act without subsequent amendment of this contract specifically incorporating such provisions.

The contractor (which term as used in this sentence means the party contracting to perform the work or furnish the materials required by this contract) shall insert the provisions of this article in each subcontract and purchase order made or issued in carrying out the contract.

Nothing contained in this clause shall impose any renegotiation obligation with respect to this contract or any subcontract hereunder which is not imposed by an act of the Congress, heretofore or hereafter enacted.

14. Participating Members - (a) Indebted to United States. The Participating Members of the association constituting the Underwriting Agent, severally but not jointly and limited each to its participation therein, shall be indebted to the United States for such amounts as the Secretary is entitled to recover from the Underwriting Agent in accordance with the foregoing provisions and, in the event of failure to pay on demand, the Secretary may bring an action or actions in any court in the United States to recover such amount or amounts from the Participating Members, severally but not jointly, on behalf of the United States.

(b) Change of shares. Without cancelling this Agreement, the Participating Members of the association constituting the Underwriting Agent may, upon not less than ten (10) days' prior written notice to the Administrator, change their share of participation by agreement among themselves, including the termination of the interests of one Participating Member and the assumption of its share by one or more of the other Participating Members or by the admission of other eligible domestic insurance companies to membership in the association. Any such change of apportionment or termination of participation shall not relleve any Participating Member of its obligations in respect to matters which occurred prior to any change or termination of its interest. Unless the Underwriting Agent is notified in writing by the Administrator, within ten (10) days after receipt of notice from the Underwriting Agent, that the proposed change in participation or termination or assumption is disapproved, such change shall be understood to be acceptable to the Administrator.

In witness whereof, the parties hereto have duly executed this Agreement in quadrupli

Subpart B-War Risk Hull and

Disbursements Insurance § 308.100 Amounts of insurance for

which application may be made. An applicant for war risk hull insurance shall state the amount of insurance desired but any payment of claim for damage to or actual or constructive total loss of the vessel insured shall be made as provided $ 308.103(a). An applicant desiring disbursements insurance may at his option obtain such additional insurance but any claim for loss of disbursements as a consequence of the actual or constructive total loss of the vessel insured shall be made as provided in § 308.103(c). $ 308.101 Form of application.

Applications submitted shall be in strict accordance with the following form: Form MA-183 (Revised 5-61)

UNITED STATES OF AMERICA
DEPARTMENT OF COMMERCE
MARITIME ADMINISTRATION

APPLICATION FOR WAR RISK HULL AND DISBURSE

MENTS INSURANCE

Application is made for War Risk Hull Insurance and Disbursements Insurance, when

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(Date built) Hull-Sum insured

dollars ($------), but in the event of damage to or actual or constructive total loss of the vessel, the insured value will be not in excess of

* which latter amount is the stated valuation of the vessel determined by the Secretary of Commerce in accordance with section 1209(a), Title XII of Merchant Marine Act, 1936, as amended. This insurance does not cover loss of disbursements (provided herein below, as additional coverage) as a consequence of the actual or constructive total loss of said vessel. It is understood that, with respect to damage to or actual or constructive total loss of the vessel, this insurance shall not exceed the "sum insured" or the "stated valuation", whichever is the lesser amount.

Disbursements (consumable and subsist. ence stores, slop chests, bar stock and bunker fuel) insured for

dollars ($-------) against the risks of loss as a consequence of the actual or constructive total loss of the vessel insured hereunder. This insurance is optional and is provided applicants for hull insurance, as additional coverage. In the event of loss, payment of claim shall be limited to the actual value of the disbursements lost but not exceeding the amount SO insured.

To attach automatically upon and simultaneously with the outbreak of war (whether there be a declaration of war or not) between any of the following countries: United States of America, United Kingdom, France, the Union of Soviet Socialist Republics, the People's Republic of China; upon the occurrence of any prior hostile act or acts by any of the said countries resulting in such outbreak of war and occurring within a period of 90 days preceding such outbreak of war.

To terminate thirty (30) days after the outbreak of war (whether there be a declaration of war or not) between any of the aforesaid countries.

Terms and conditions: Subject to form of policy prescribed by the Maritime Administrator, acting for the Secretary of Commerce.

The category (one only) of eligibility under which application is made must be designated. o(a)

A vessel registered, enrolled or licensed under the laws of the United States; any tug or barge or other watercraft (documented under the laws of the United States, or undocumented) owned by a citizen of the United States, used in essential water transportation within the territorial waters of the United States; and United States citizen. owned watercraft in the fishing trade or industry, except when used exclusively in or for sport fishing.

(b) (1) A foreign-flag vessel under Panamanian, Honduran or Liberian registry, 1,500 gross tons and over, self-propelled, and not over twenty years of age (unless authorized by the Maritime Administration), which is subject to an unqualified Contract of Commitment with the United States in form as required by the Maritime Administration, and which is owned by a U.S. corporation, or a foreign corporation in which a majority of the stock is owned and controlled by United States citizens, whether direct or through intervening corporations, foreign or domestic Where such intervening corporations ar6 foreign, the ultimate majority ownership and control of the stock of such corporations must be vested in a citizen or citizens of the United States as deined in section 1201(d), Merchant Marine Act, 1936, as amended. 0 (b)(2)

A foreign-flag vessel under Panamanian, Honduran or Liberian registry, 1,500 gross tons and over, self-propelled, and not over twenty years of age (unless authorized by the Maritime Administration), which is subJect to an unqualified Contract of Commitment with the United States in form as required by the Maritime Administration, and which is owned by a foreign corporation which is not directly or beneficially owned by United States citizens or corporations, but which vessel is under a long-term charter or other long-term contract covering the use of the vessel on terms deemed by the Maritime Administration to subject the vessel to U.S. control in the event of emergency. The charterer of such a vessel must be either a U.S. corporation or a foreign corporation in which a majority of the stock is owned and controlled by U.S. citizens, whether direct or through intervening corporations, foreign or domestic. Where such

•If this valuation is not inserted when the binder is issued, it will be published in the FEDERAL REGISTER pursuant to Maritime Administration General Order 82 as amended from time to time.

intervening corporations are foreign, the ultimate majority ownership and control of the stock of such corporations must be vested in a citizen or citizens of the United States as defined in section 1201(d), Merchant Marine Act, 1936, as amended.

(c) All other vessels will be insured at the sole discretion of the Maritime Administrator but only when engaged in a service which has been determined by the Maritime Administrator to be in the interest of the national defense or the national economy of the United States.

It is warranted, as to a vessel in any of the above categories, that at all times during the binder period or any period of Insurance attaching thereunder, the vessel will comply with Department of Commerce Transportation Orders T-1 and T-2 or any modification thereof so long as they remain in force.

The applicant warrants as to a vessel in any eligible category of the application that, without prior approval of the Maritime Administration, the vessel will not, at any time during the binder period or any period of Insurance attaching hereunder, be chartered for a period of longer than six (6) months, or for a voyage or voyages the duration of which will probably exceed six (6) months, to any person not a citizen of the United States, nor be chartered to such a non-citizen under a demise or bareboat form of charter, nor be chartered to such a non-citizen for the carriage of cargoes of any kind to or from any of the countries listed in Maritime Administration General Order 59 or any modification thereof so long as it remains in force, or for use in the fisheries.

The applicant further warrants with respect to a vessel in category (a) that at and from the date of issuance of the interim binder and for and during the term of any insurance attaching thereunder, such vessel will remain eligible within its category.

The applicant further warrants with respect to a vessel in category (b) (1) or (b) (2) that the vessel will maintain its eligibility within its applicable category at all times from and after the issuance of the interim binder, and will be made available to the United States Government upon request in the event of national emergency pursuant to the terms of the Contract of Commitment submitted herewith; and agrees, in this connection, that during the period of the binder and any insurance attaching thereunder, any charter or other contract covering the use of the vessel during such period shall be subject to termination or suspension without notice in the event the United States requires the use of the vessel under the voluntary Contract of Commitment submitted herewith.

With respect to a vessel in category (c). the applicant further warrants that at all times such vessel will remain in the approved service which the Maritime Administrator has found to be in the interest of the national economy or the national defense of the United States.

In addition to the aforesaid warranties, the applicant submits certain statements, certifi. cates and/or agreements which are made part of the insurance application, for vessels in the following categories:

Category (b)(1) applications: (a) An executed Contract of Commitment, in form as prescribed in $ 308.5, under which applicant commits itself to make the vessel avallable to the U.S. Government upon request in the event of national emergency on the same terms and conditions as vessels owned by citizens of the United States are available for requisition, for title, or for use, in accordance with the provisions of section 902(a), Merchant Marine Act, 1936, as amended. In the event this insurance application is determined to be ineligible under the terms of the Maritime Administration's regulations, it is understood that the applicant will be so advised and the executed Contract of Commitment (which is submitted in consideration of the issuance of such insurance) shall be returned to applicant by the Maritime Administration. (b) A certificate of citizenship, in duplicate, executed by the vessel owner establishing that the vessel is owned by a U.S. corporation, or that a majority of the stock of the owning corporation is owned and controlled by U.S. citizens, as defined in section 1201 (d). Merchant Marine Act, 1936, as amended, whether direct or through intervening corporations, foreign or domestic. (c) Where such intervening corporations are foreign, an additional certificate in duplicate, shall be executed by each such corporation establishing that the ultimate majority ownership and control of the stock of such corporation is vested in a citizen or citizens of the United States as defined in section 1201 (d), Merchant Marine Act, 1936, as amended. All citizenship certificates shall be in the form prescribed in $ 308.4. (d) If prior official action or approval of the Contract of Commitment with the United States is required by the government of the country of vessel's registry as a prerequisite to the execution of such a contract, applicant attaches a certified copy of such oficial action or approval. I a vessel in category (b) (1) attains twenty years of age on or prior to the effective date of this insurance, applicant agrees that the subject Insurance shall not attach without Maritime Administration approval.

Category (b)(2) applications: (a) A Contract of Commitment executed by both the owner and charterer in form as prescribed in $ 308.5, under which they commit themselves to make the vessel available to the U.S. Government upon request in the event of na. tional emergency on the same terms and conditions as vessels owned by citizens of the United States are available for requisition, for title, or for use, in accordance with the provisions of section 902(a), Merchant Marine Act, 1936, as amended. In the event this insurance application is determined to be ineligible under the terms of the Maritime Administration's regulations, it is

understood that the applicants will be so extent as though set out in full in such advised and the executed Contract of Com- documents. mitment (which is submitted in considera- Binding fee (not returnable unless applition of the issuance of such insurance) cation is rejected). shall be returned by the Maritime Adminis- $25.00 per vessel, under 500 gross tons. tration. (b) A copy of the long-term char- $100.00 per vessel, 500 gross tons and over. ter or other long-term contract covering the Check payable to the order of “Maritime use of the vessel and all addenda, certified to Adm.-Commerce", enclosed herewith. be full and complete copies (except as to Rate of premium-to be ixed by the Marirate of hire or freight). The charter also time Administrator, acting for the Secretary agrees to furnish the Maritime Administra- of Commerce. tion a certified copy of any subsequent Dated

19... amendments to such charter. (c) A certifi.

Applicant(s) cate of citizenship, in duplicate, executed by

By: the charterer establishing that it is a U.S.

(Authorized signature) corporation, or a foreign corporation in which a majority of the stock is owned and con

By: trolled by U.S. citizens, whether director

(Authorized signature) through intervening corporations, which may Binder to be sent to: be either foreign or domestic. (d) Where

Name such intervening corporations are foreign, an

Address additional certificate, in duplicate, shall be executed by each such corporation establish

(Applications on category (a) vessels to be

submitted, ing that the ultimate majority ownership and

in duplicate, with required control of the stock of such corporation is

attachments, to the American War Risk vested in a citizen or citizens of the United

Agency, 99 John Street, New York 38, N.Y. States as defined in section 1201 (d), Mer.

Applications on all other vessels to be subchant Marine Act, 1936, as amended. All

mitted, in triplicate, with required attachcitizenship certificates shall be in the form

ments, to the Division of Insurance, U.S. prescribed in $ 308.4. (e) If prior oficial

Maritime Administration, Washington 25, action or approval of the Contract of Com

D.C.) mitment with the United States is required (G.O. 75, 2d Rev., 26 F.R. 4541, May 26, 1961, by the government of the country of vessel's as amended by Amdt. 10, 31 F.R. 1201, registry as a prerequisite to the execution Jan. 29, 1966) of such a contract, applicants attach a certi. fed copy of such official action or approval.

$ 308.102 Issuance of interim binder; = If a vessel in category (b) (2) attains twenty

its terms and conditions. years of age on or prior to the effective date

Upon acceptance of an application, an of this insurance, applicants agree that the

interim binder in form as set forth in subject insurance shall not attach without Maritime Administration approval.

$ 308.106 will be issued and there shall be Category (c) applications. A Copy of the

deemed to be incorporated therein by statement of vessel's service previously sub

reference all the terms, conditions, and mitted by the applicant, which was the sub- warranties contained in the application ject of a finding by the Maritime Adminis- for war risk hull and disbursements intrator that such service is deemed to be in surance (set forth in $ 308.101) and the the interest of the national defense or the

standard war risk hull insurance policy national economy of the United States.

(set forth in § 308.107) to the same exWarranted free from any claim for loss,

tent as if such application and policy damage or expense covered under any commercial policy in effect for the benefit of the

were made a part of the binder. The assured.

binding fee shall be $25.00 per vessel unWarranted free from any claim for loss,

der 500 gross tons and $100.00 per vessel damage or expense which is or could be cov- of 500 gross tons or over. ered by a commercial war risk policy contain

§ 308.103 Sums which will be insured ing the American Institute War Risk and Strikes and Automatic Termination and Can

under interim binder. cellation Clauses (Time)—Hulls—(March 7, (a) The valuation in the policy for 1961).

damage to or actual or constructive total Applicant also attaches appropriate vessel

loss of the vessel insured shall be a stated data in form as specified in Maritime Administration General Order 82, as amended from

valuation (exclusive of National Defense time to time, and as published in the FED

features paid for by the Government) deERAL REGISTER.

termined by the Secretary of Commerce The warranties and representations in this which shall not exceed the amount that application, which are made in consideration

would be payable if the vessel had been of the issuance of the insurance above indi. cated, shall become a part of and be deemed

requisitioned for title under section 902 i incorporated in the binder and in any insur. (a) at the time of the attachment of the ance policy issued thereunder, to the same insurance under said policy: Provided,

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