Common use of BUILDER’S GUARANTEE Clause in Contracts

BUILDER’S GUARANTEE. (a) The Builder shall guarantee the Vessel against any Defects (see Definitions) provided such Defects are: (i) discovered within the number of months stated in Box 20 (hereinafter “the Guarantee Period”) after delivery of the Vessel in accordance with Clause 28 (Delivery); and (ii) notice thereof is given to the Builder as soon as reasonably possible after the discovery thereof and latest thirty (30) running days after the expiry of the Guarantee Period describing such Defects so far as reasonably practical (hereinafter called “Guarantee Defects”). (b) The Builder shall make any necessary repairs or replacements to rectify any Guarantee Defects or damage to the Vessel caused as a direct and immediate consequence of such Guarantee Defects. Such repairs and replacements shall be made at the Shipyard at the Builder’s cost and expense. (c) The Buyer shall have the right to arrange for the necessary repairs to rectify any Guarantee Defects or damage to the Vessel caused as a direct and immediate consequence of such Guarantee Defects to be made elsewhere or obtain any necessary replacement parts and materials: (i) if it is impractical to bring the Vessel to the Shipyard; or (ii) if the Builder cannot supply necessary replacement parts and materials without impairing or delaying the operation or working of the Vessel. (d) In the event that the Buyer makes the necessary repairs or replacements at any other shipyard or works other than the Shipyard, the Buyer shall first, but as soon as possible, give the Builder notice of the time and place such repairs will be made. The Builder shall have the right, without prejudice, to inspect through its own representative the nature and extent of the Guarantee Defects to be replaced or repaired. The Buyer shall provide the necessary assistance to the Builder to enable the Builder to board the Vessel to perform the necessary inspections at a time to be mutually agreed, taking into consideration the intent not to impair or delay the operation of the Vessel. The Builder shall, in such case, promptly advise the Buyer in writing, after such examination has been completed, of its acceptance or rejection of such Guarantee Defects as ones that are covered by the guarantee. (i) The Builder shall pay the Buyer in the currencies stated in Box 9 the reasonable documented cost and expenses of such repairs or replacements, provided that the Buyer shall use reasonable endeavors to keep such costs as low as reasonably possible. (ii) Where applicable, the Buyer shall return replaced parts to the Builder at the Builder’s request and cost and expense provided the Builder makes such request at the time of the replacement. In the event that they are the subject of a dispute under Clause 42 (Dispute Resolution), the Builder shall hold the replaced parts available for inspection by the Buyer. Upon their replacement, the ownership of replaced parts shall revert to the Builder. (e) In any case, the Vessel shall be taken, at the Buyer’s cost, to the place elected, ready in all respects for such repairs or replacement. (f) The Builder guarantees repairs or replacements to the Vessel made under sub-clause (b) above for an additional Guarantee Period of the number of months stated in Box 21 from the date of completion of such repairs or replacements provided such work has been performed by the Builder or its Sub-contractors. The additional Guarantee Period shall, however, not end on a date earlier than the end of the original Guarantee Period for any such item. However the total Guarantee Period shall not exceed 24 months after Vessel delivery. (g) If, as a result of the guarantee works, the Vessel has been lying idle continuously for a period in excess of thirty (30) days, the Guarantee Period shall be extended by the total number of such days (counting from the first day the Vessel is idle) that fall within the Guarantee Period, whether or not other work was carried out during such period. (h) Without prejudice to any other rights the Buyer may have under this Contract, following the expiry of the Guarantee Period or in the event that the Builder is in breach of its obligation to rectify Guarantee Defects in accordance with this Clause, the Builder shall at the Buyer’s request assign (to the extent to which it may validly do so) to the Buyer, or as the Buyer may direct, the right, title and interest of the Builder in and to all guarantees or warranties given by the Sub-contractors or suppliers of any of the materials or equipment used in the construction of the Vessel. (i) Upon delivery of the Vessel the Builder shall also provide the Buyer with a guarantee issued by the party named in Box 32 (or if Box 32 is not filled in, a bank guarantee from a first class international bank acceptable to the Buyer) substantially in the form and substance set out in Annex A(iii) for 5 % of the Contract Price, as security for the Builder’s obligations under Clause 35 (the "Warranty Guarantee"). (j) The Builder shall have no liability under this Clause 35 for defects or malfunction in the Vessel caused by normal wear and tear, or due to perils of the sea, rivers or navigation, or fire or accidents at sea, or by mismanagement or negligence or willful neglect in the use and maintenance of the Vessel or alteration or addition on the part of the Buyer, its employees or agents, including the Vessel’s officers, crew and passengers. Further the Builder shall not be liable for repairs or replacements carried out by the Buyer or others (i.e. repairs or replacements which have not been carried out by the Builder or its subcontractors) save where such repairs or replacements have been carried out in accordance with Clause 35(d).

BUILDER’S GUARANTEE. (a) The Builder shall guarantee the Vessel against any Defects (see Definitions) provided such Defects are: (i) discovered within in accordance with the number terms and conditions of months stated in Box 20 this Contract (hereinafter called the “Guarantee”). If, within twenty-four (24) months, or such longer period as might be specified with respect to certain equipment or machinery in the Specifications or in this Article XIV (hereinafter called the “Guarantee Period”) after delivery the Delivery and Acceptance of the Vessel, any defect in the Vessel (except the Buyer-furnished Equipment), its design, machinery, equipment, or other appurtenances, due to defective materials or workmanship, or failure to construct in accordance conformity with Clause 28 the Plans and Specifications (Delivery); and (ii) notice thereof is given all hereinafter referred to the Builder as soon as reasonably possible after the discovery thereof and latest thirty (30) running days after the expiry of the Guarantee Period describing such Defects so far as reasonably practical (hereinafter called “Guarantee Defects”), shall be discovered (other than defects solely due to normal wear and tear, negligence or improper acts of the operator or crew of said Vessel, or overloading, improper loading, stowage, and accident), the Builder shall as quickly as possible after receipt of the Buyer’s written notice thereof, correct, replace, or repair such defect at its own expense at its Shipyard; provided that if, in the Buyer’s opinion, the Vessel cannot conveniently be brought to the Shipyard, and if no other agreement can be reached between the Parties, the Builder shall pay to the Buyer the reasonable cost of making repairs or replacements in a first class shipyard, at the prices prevailing at the time such repairs or replacements are made. The ballast tank coatings shall be guaranteed for twenty-four (24) months after Delivery by the Builder and for a further thirty-six (36) months by the paint manufacturer. Builder guarantees the cargo containment system against any design or construction defect or failure for sixty (60) months after Delivery. Replacement parts or materials to be furnished to the Buyer by Builder for making of repairs under this Guarantee which are performed other than at the Shipyard or in such other facility of the Builder shall be transported to the place of repair at the Builder’s expense. In principle, such transportation shall be by the most expeditious public surface transportation. If required to keep the Vessel in operation, the Builder shall arrange for and bear the cost of transporting necessary parts or materials by air transportation. The Builder shall in every case use its best efforts to expedite the furnishing to the Buyer of replacement parts or materials required under this Guarantee. Technicians and specialists necessary to perform repairs under the Guarantee are to be furnished by the Builder at the Builder’s expense, including transportation costs to and from the Vessel in case that the Buyer and the Builder mutually agree or such repairs seriously affect the operation of the Vessel. Repairs under this Article are guaranteed for the balance of the period set out in paragraph (a) of this Article; however, major repairs shall be guaranteed for the longer of (x) the balance of the period set out in paragraph (a) of this Article, or (y) two (2) months from the date of completion of such major repairs, but in no event longer than twenty-six (26) months after the Delivery Date. For purposes of this paragraph, “major repairs” shall be any repair costing more than Thirty Five Thousand United States Dollars (US$35,000). If a Guarantee Defect can be repaired or replaced by the Vessel’s crew, the Buyer will give prior notice to the Builder of such defect, and upon the Builder’s acceptance that the Buyer may remedy such defect, the Builder will reimburse the Buyer for the incremental costs of the crew’s labor so incurred, or the cost of such labor at the Builder’s Shipyard, whichever is the lesser, excluding normal maintenance. Guarantee Defects that affect the safety of the Vessel or crew and/or constitute an emergency, shall be repaired either by the crew or the Buyer-selected contractor in a reasonable manner under the circumstances without the Builder’s prior approval, and the Builder shall be notified as soon as possible after the repairs are undertaken and such repair work will be subject to mutual agreement between the parties; provided any such repair work shall not adversely affect any provisions of this Article XIV as to any other Guarantee Defect. In any case, the Builder shall also reimburse the Buyer for the actual cost, in the currency incurred, of any temporary repairs necessary to enable the Vessel to present itself for permanent repairs. Builder’s liability for defects in the Vessel, its machinery, equipment or other appurtenances, shall be as provided in this Article XIV, and the Builder shall be under no obligation for defects in workmanship or contractor supplied materials in any part of the Vessel which have been replaced or in any way repaired by any contractor, unless such contractors have been appointed or approved by the Builder, such appointment or approval not to be unreasonably withheld or delayed. In no event shall the Builder be liable for any consequential damages or for any loss of hire or time in operation on repair of the Vessel. The Parties hereto agree that there are no warranties intended or given, which extend beyond those specified in this Contract, and that the provisions of this Article XIV exclude and negate any warrantee, express or implied (including any implied warranty of merchantability or fitness for particular purpose), or other or responsibility or liability imposed by law, statute, or otherwise with respect to the Vessel. (b) For the detection of any underwater Guarantee Defects, which cannot be detected while the Vessel is afloat, the Buyer at its expense may drydock the Vessel within the Guarantee Period. The Buyer shall pay, at its expense, the haul day and lay days required to accomplish the Vessel’s normal drydocking maintenance. However, if any underwater Guarantee Defects are discovered, and the correction of which requires additional drydocking time, the Builder, in addition to the cost of correcting Guarantee Defects, shall also pay the drydocking charge for the additional days spent in the drydock, if any. Alternatively, the Buyer may choose to conduct an underwater survey in lieu of drydocking within the Guarantee Period to determine if any defects exist as to any area of the Vessel, which is below the waterline for the Vessel. If any underwater Guarantee Defects are found, the Builder shall make pay to correct the defects at Vessel’s first drydocking. In addition to remedying the Guarantee Defects, the Builder shall pay the drydocking charge for each additional day beyond those needed for routine maintenance. The Buyer shall notify the Builder of the time and place of any drydocking or underwater survey for the purpose of discovery of underwater Guarantee Defects so that the Builder may attend at its own expense, if it so desires. Notwithstanding the foregoing, if at any time during Guarantee Period it becomes necessary repairs or replacements to rectify drydock the Vessel for correction of any Guarantee Defects, the cost of the entire drydocking as well as the cost of remedying Guarantee Defects or damage to the Vessel caused as a direct and immediate consequence of such Guarantee Defects. Such repairs and replacements shall be made at the Shipyard at expense of the Builder’s cost and expense; provided that if any work is carried out for the Buyer during such drydocking, the Buyer shall pay the drydocking charge for the additional days spend in the drydock, if any. (c) The Buyer shall notify the Builder in writing, or by facsimile, of any defects for which claim is made under this Guarantee within a reasonable time after the discovery thereof. The Buyer’s written notice shall describe in detail the nature and ascertainable cause and extent of the defects. The Builder shall in any event have the right to arrange for the necessary repairs to rectify no obligation in respect of any Guarantee Defects or damage to the Vessel caused as a direct and immediate consequence defects, unless notice of such Guarantee Defects to be made elsewhere or obtain any necessary replacement parts and materials: (i) if it defects is impractical to bring the Vessel to the Shipyard; or (ii) if received by the Builder cannot supply necessary replacement parts and materials without impairing or delaying later than fourteen (14) days after the operation or working expiry of the VesselGuarantee Period. (d) In the event that the Buyer makes the necessary repairs or replacements at any other shipyard or works other than the Shipyard, the Buyer shall first, but as soon as possible, give the Builder notice of the time and place such repairs will be made. The Builder shall have the right, without prejudice, to inspect through its own representative the nature and extent of the Guarantee Defects to be replaced or repaired. The Buyer shall provide the necessary assistance to the Builder to enable the Builder to board the Vessel to perform the necessary inspections at a time to be mutually agreed, taking into consideration the intent not to impair or delay the operation of the Vessel. The Builder shall, in such case, promptly advise the Buyer in writing, after such examination has been completed, of its acceptance or rejection of such Guarantee Defects as ones that are covered by the guarantee. (i) The Builder shall pay the Buyer in the currencies stated in Box 9 the reasonable documented cost and expenses of such repairs or replacements, provided that the Buyer shall use reasonable endeavors to keep such costs as low as reasonably possible. (ii) Where applicable, the Buyer shall return replaced parts to the Builder at the BuilderUpon Buyer’s request and cost and expense provided the Builder makes such request at the time of the replacement. In the event that they are the subject of a dispute under Clause 42 (Dispute Resolution), the Builder shall hold the replaced parts available for inspection by the Buyer. Upon their replacement, the ownership of replaced parts shall revert assign a “Guarantee Engineer” to the Builder. (e) In any caseVessel, the Vessel who shall be taken, at the Buyer’s cost, to the place elected, ready in all respects for such repairs or replacement. (f) The Builder guarantees repairs or replacements to the Vessel made under sub-clause (b) above for an additional Guarantee Period of the number of months stated in Box 21 from the date of completion of such repairs or replacements provided such work has been performed by the Builder or its Sub-contractors. The additional Guarantee Period shall, however, not end on a date earlier than the end of the original Guarantee Period for any such item. However the total Guarantee Period shall not exceed 24 months after Vessel delivery. (g) If, as a result of the guarantee works, the Vessel has been lying idle continuously for a period in excess of thirty (30) days, the Guarantee Period shall be extended by the total number of such days (counting from the first day the Vessel is idle) that fall within the Guarantee Period, whether or not other work was carried out during such period. (h) Without prejudice to any other rights the Buyer may have under this Contract, following the expiry of the Guarantee Period or in the event that the Builder is in breach of its obligation to rectify Guarantee Defects in accordance fully conversant with this Clause, the Builder shall at the Buyer’s request assign (to the extent to which it may validly do so) to the Buyer, or as the Buyer may direct, the right, title and interest of the Builder in and to all guarantees or warranties given by the Sub-contractors or suppliers of any of the materials or equipment used in the construction of the Vessel. (i) Upon delivery of the Vessel the Builder shall also provide the Buyer with a guarantee issued by the party named in Box 32 (or if Box 32 is not filled in, a bank guarantee from a first class international bank acceptable to the Buyer) substantially in the form and substance set out in Annex A(iii) for 5 % of the Contract Price, as security for the Builder’s obligations under Clause 35 (the "Warranty Guarantee"). (j) The Builder shall have no liability under this Clause 35 for defects or malfunction in the Vessel caused by normal wear and tear, or due to perils of the sea, rivers or navigation, or fire or accidents at sea, or by mismanagement or negligence or willful neglect in the use and maintenance of the Vessel or alteration or addition on machinery, for a period of three (3) months following Delivery. At the part option of the Buyer, its employees or agentsthe Buyer may request the services of the Guarantee Engineer for an additional period of up to six (6) months beyond the initial three (3) months. While said Guarantee Engineer shall remain the employee of the Builder, including he shall sign the Vessel’s Articles, be accorded the status of chief engineer, and shall receive from the Buyer free lodging, board, medical care, and communication services equal to one of the Vessel’s officers, crew and passengersif required, free passage to Korea. Further The Buyer shall pay to the Builder for the services of the Guarantee Engineer the sum of Five Thousand United States Dollars (US$5,000) per month as compensation for the services of the Guarantee Engineer. The detailed terms and conditions on assignment of the Guarantee Engineer shall not be liable for repairs the subject of a separate agreement to be executed on or replacements carried out by before the Buyer or others (i.e. repairs or replacements which have not been carried out by the Builder or its subcontractors) save where such repairs or replacements have been carried out in accordance with Clause 35(d)date of Delivery.

BUILDER’S GUARANTEE. (a) The If, within twelve (12) months, or such longer period as might be specified with respect to certain equipment or machinery in the Specifications, and eighteen (18) months for main engine (hereinafter called the "Guarantee Period") after the Delivery and Acceptance of the Vessel, any defect in the Vessel (except the Buyer's Supplies), its design, machinery, equipment, or other appurtenances, due to defective materials or workmanship, or failure to construct in conformity with the Plan and Specifications (all hereinafter referred to as "Guarantee Defects"), shall be discovered (other than defects solely due to normal wear and tear, negligence or improper acts of the operator or crew of said Vessel or overloading, improper loading, stowage, and accident), the Builder shall, as quickly as possible after receipt of the Buyer's written notice thereof, correct, replace, or repair such defect at its own expense at its Shipyard; provided that if, in the Buyer's opinion, the Vessel cannot conveniently be brought to the Shipyard, and if no other agreement can be reached between the parties, the Builder shall guarantee pay to the Vessel against any Defects (see Definitions) provided such Defects are:Buyer the lesser of (i) discovered within the number cost to the Buyer of months stated in Box 20 (hereinafter “the Guarantee Period”) after delivery of the Vessel in accordance with Clause 28 (Delivery); andsuch repairs, or (ii) such sum as the Builder would have charged a repair customer for like repairs and/or replacements had such work been done at the Shipyard. Replacement parts or materials to be furnished to Buyer by Builder for making of repairs under the Guarantee which are performed other than at Shipyard or in such other facility of Builder shall be transported to the place of repair at Builder's expense. In principle, such transportation shall be by the most expeditious public surface transportation. If required to keep Vessel in operation, Builder shall arrange for and bear the cost of transporting necessary parts or materials by air transportation. Builder shall in every case use its best efforts to expedite the furnishing to Buyer of replacement parts or materials required under the Guarantee. Repairs under this Article are guaranteed for the balance of the period set out in paragraph (a) of this Article however major repairs shall be guaranteed for the longer of (x) the balance of the period set out in paragraph (a) of this Article or (y) two (2) months from the date of completion of such major repairs, but in no event longer than fourteen months (14) after the Delivery Date. For purposes of this paragraph, "major repairs" shall be any repair costing more than ten thousand United States Dollars (US$10,000). If such defect can be repaired or replaced by the Vessel's crew, the Buyer will give prior notice thereof is given to the Builder of such defect, and upon the Builder's written acceptance that the Buyer may remedy such defect, and the Builder will reimburse the Buyer for the incremental costs of the crew's labor so incurred or the costs of such labor at the Builder's Shipyard, whichever is the lesser, excluding normal maintenance. Guarantee Defects that affect the safety of the Vessel or crew and/or constitute an emergency, shall be repaired either by the crew or Buyer selected contractor in a reasonable manner under the circumstances without Builder's prior approval and the Builder shall be notified as soon as reasonably possible after the discovery thereof repairs are undertaken and latest thirty (30) running days after such repair work will be subject to mutual agreement between the expiry parties; provided any such repair work shall not adversely affect any provisions of this Article XIII as to any other Guarantee Defect. In any case, the Builder shall also reimburse the Buyer for the actual cost, in the currency incurred, of any temporary repairs necessary to enable the Vessel to present itself for the aforesaid permanent repairs. As to such defects as are repaired or replaced by the Builder, the guarantee hereunder shall be subject to an agreement between the Builder and Buyer which addresses defects so repaired or replaced. The Builder's only liability for defects in the Vessel, its machinery, equipment or other appurtenances, as aforesaid, shall be as hereinabove provided and the Builder shall be under no obligation for defects in workmanship or contractor supplied materials in any part of the Guarantee Period describing Vessel which have been replaced or in any way repaired by any contractors, unless such Defects so far as reasonably practical contractors have been appointed or approved by the Builder. In no event shall the Builder be liable for any consequential damages or for any loss of hire or time in operation or repair of the Vessel. The parties hereto agree that there are no warranties intended or given, which extend beyond those specified in this Contract, and that the provisions of this Article XIII exclude and negate any warranty, express or implied (hereinafter called “Guarantee Defects”including any implied warranty of merchantability or fitness for particular purpose), or other or further responsibility or liability imposed by law, statute, or otherwise with respect to the Vessel. (b) The For the detection of any underwater Guarantee Defects, which cannot be detected while the Vessel is afloat, Buyer at its expense, may drydock the Vessel within the Guarantee Period. Buyer shall pay, as its expense, the haul day and lay days required to accomplish the Vessel's normal drydocking maintenance. However, if any underwater Guarantee Defects are discovered, and the correction of which requires additional drydocking time, the Builder, in addition to the cost of correcting Guarantee Defects shall also pay the drydocking charge for the additional days spent in the drydock, if any. Alternatively, the Buyer may choose to conduct an underwater survey in lieu of drydocking within the Guarantee Period to determine if any defects exist as to any area of the Vessel which is below the waterline for such Vessel. If any underwater Guarantee Defects are found, the Builder shall make pay to correct the defects at Vessel's first drydocking. In addition to remedying the Guarantee Defects, the Builder shall pay the drydocking charge for each additional day beyond those needed for routine maintenance. The Buyer shall notify the Builder of the time and place of any drydocking or underwater survey for the purpose of discovery of underwater Guarantee Defects so that the Builder may attend at its own expense, if it so desires. Notwithstanding the foregoing, if at any time during Guarantee Period it becomes necessary repairs or replacements to rectify drydock the Vessel for correction of any Guarantee Defects, the cost of the entire drydocking as well as the cost of remedying Guarantee Defects or damage to the Vessel caused as a direct and immediate consequence of such Guarantee Defects. Such repairs and replacements shall be made at the Shipyard at expense of the Builder’s cost and expense; provided that if any work is carried out for the Buyer during such drydocking, the Buyer shall pay the drydocking charge for the additional days spent in the drydock, if any. (c) The Buyer shall notify the Builder in writing, or by telex or facsimile, of any defects for which claim is made under this guarantee as promptly as possible after the discovery thereof. The Buyer's written notice shall describe in detail the nature and ascertainable cause and extent of the defects. The Builder shall in any event have the right to arrange for the necessary repairs to rectify no obligation in respect of any Guarantee Defects or damage to the Vessel caused as a direct and immediate consequence defects, unless notice of such Guarantee Defects to be made elsewhere or obtain any necessary replacement parts and materials: (i) if it defects is impractical to bring the Vessel to the Shipyard; or (ii) if received by the Builder cannot supply necessary replacement parts and materials without impairing or delaying later than ten (10) days after the operation or working expiry of the VesselGuarantee Period. (d) In Upon Buyer's request the event that Builder shall assign a "Guarantee Engineer" to the Buyer makes Vessel, who shall be fully conversant with the necessary repairs or replacements at any other shipyard or works other than construction and maintenance of the Shipyardmachinery, for a period of three (3) months following Delivery. At the option of the Buyer, the Buyer shall first, but as soon as possible, give may request the Builder notice of the time and place such repairs will be made. The Builder shall have the right, without prejudice, to inspect through its own representative the nature and extent services of the Guarantee Defects Engineer for an additional period of up to six (6) months beyond the initial three (3) months. While said Guarantee Engineer shall remain the employee of the Builder, he shall sign the Vessel's Articles, be replaced or repairedaccorded the status of Chief Engineer and shall receive from the Buyer free lodging, board, medical care, and communication services equal to one of the Vessel's officers, and if required, free passage to Korea. The Buyer shall provide the necessary assistance pay to the Builder to enable for the Builder to board the Vessel to perform the necessary inspections at a time to be mutually agreed, taking into consideration the intent not to impair or delay the operation services of the VesselGuarantee Engineer the sum of Five Thousand United States Dollars ($5,000) per month as compensation for the services of the Guarantee Engineer. The Builder shall, in such case, promptly advise the Buyer in writing, after such examination has been completed, of its acceptance or rejection of such Guarantee Defects as ones that are covered by the guarantee. (i) The Builder shall pay the Buyer in the currencies stated in Box 9 the reasonable documented cost detailed terms and expenses of such repairs or replacements, provided that the Buyer shall use reasonable endeavors to keep such costs as low as reasonably possible. (ii) Where applicable, the Buyer shall return replaced parts to the Builder at the Builder’s request and cost and expense provided the Builder makes such request at the time conditions on assignment of the replacement. In the event that they are Guarantee Engineer shall be the subject of a dispute under Clause 42 (Dispute Resolution), the Builder shall hold the replaced parts available for inspection by the Buyer. Upon their replacement, the ownership of replaced parts shall revert separate agreement to the Builder. (e) In any case, the Vessel shall be taken, at the Buyer’s cost, to the place elected, ready in all respects for such repairs executed on or replacement. (f) The Builder guarantees repairs or replacements to the Vessel made under sub-clause (b) above for an additional Guarantee Period of the number of months stated in Box 21 from before the date of completion of such repairs or replacements provided such work has been performed by the Builder or its Sub-contractors. The additional Guarantee Period shall, however, not end on a date earlier than the end of the original Guarantee Period for any such item. However the total Guarantee Period shall not exceed 24 months after Vessel deliveryDelivery. (g) If, as a result of the guarantee works, the Vessel has been lying idle continuously for a period in excess of thirty (30) days, the Guarantee Period shall be extended by the total number of such days (counting from the first day the Vessel is idle) that fall within the Guarantee Period, whether or not other work was carried out during such period. (h) Without prejudice to any other rights the Buyer may have under this Contract, following the expiry of the Guarantee Period or in the event that the Builder is in breach of its obligation to rectify Guarantee Defects in accordance with this Clause, the Builder shall at the Buyer’s request assign (to the extent to which it may validly do so) to the Buyer, or as the Buyer may direct, the right, title and interest of the Builder in and to all guarantees or warranties given by the Sub-contractors or suppliers of any of the materials or equipment used in the construction of the Vessel. (i) Upon delivery of the Vessel the Builder shall also provide the Buyer with a guarantee issued by the party named in Box 32 (or if Box 32 is not filled in, a bank guarantee from a first class international bank acceptable to the Buyer) substantially in the form and substance set out in Annex A(iii) for 5 % of the Contract Price, as security for the Builder’s obligations under Clause 35 (the "Warranty Guarantee"). (j) The Builder shall have no liability under this Clause 35 for defects or malfunction in the Vessel caused by normal wear and tear, or due to perils of the sea, rivers or navigation, or fire or accidents at sea, or by mismanagement or negligence or willful neglect in the use and maintenance of the Vessel or alteration or addition on the part of the Buyer, its employees or agents, including the Vessel’s officers, crew and passengers. Further the Builder shall not be liable for repairs or replacements carried out by the Buyer or others (i.e. repairs or replacements which have not been carried out by the Builder or its subcontractors) save where such repairs or replacements have been carried out in accordance with Clause 35(d).

BUILDER’S GUARANTEE. (a) The Builder shall guarantee the Vessel against any Defects (see Definitions) provided such Defects are: (i) discovered within in accordance with the number terms and conditions of months stated in Box 20 this Contract (hereinafter called the “Guarantee”). If, within twenty-four (24) months, or such longer period as might be specified with respect to certain equipment or machinery in the Specifications or in this Article XIV (hereinafter called the “Guarantee Period”) after delivery the Delivery and Acceptance of the Vessel, any defect in the Vessel (except the Buyer-furnished Equipment), its design, machinery, equipment, or other appurtenances, due to defective materials or workmanship, or failure to construct in accordance conformity with Clause 28 the Plans and Specifications (Delivery); and (ii) notice thereof is given all hereinafter referred to the Builder as soon as reasonably possible after the discovery thereof and latest thirty (30) running days after the expiry of the Guarantee Period describing such Defects so far as reasonably practical (hereinafter called “Guarantee Defects”), shall be discovered (other than defects solely due to normal wear and tear, negligence or improper acts of the operator or crew of said Vessel, or overloading, improper loading, stowage, and accident), the Builder shall as quickly as possible after receipt of the Buyer’s written notice thereof, correct, replace, or repair such defect at its own expense at its Shipyard; provided that if, in the Buyer’s opinion, the Vessel cannot conveniently be brought to the Shipyard, and if no other agreement can be reached between the Parties, the Builder shall pay to the Buyer the reasonable cost of making repairs or replacements in a first class shipyard, at the prices prevailing at the time such repairs or replacements are made. The ballast tank coatings shall be guaranteed for twenty-four (24) months after Delivery by the Builder and for a further thirty-six (36) months by the paint manufacturer. Builder guarantees the cargo containment system against any design or construction defect or failure for sixty (60) months after Delivery. Replacement parts or materials to be furnished to the Buyer by Builder for making of repairs under this Guarantee which are performed other than at the Shipyard or in such other facility of the Builder shall be transported to the place of repair at the Builder’s expense. In principle, such transportation shall be by the most expeditious public surface transportation. If required to keep the Vessel in operation, the Builder shall arrange for and bear the cost of transporting necessary parts or materials by air transportation. The Builder shall in every case use its best efforts to expedite the furnishing to the Buyer of replacement parts or materials required under this Guarantee. Technicians and specialists necessary to perform repairs under the Guarantee are to be furnished by the Builder at the Builder’s expense, including transportation costs to and from the Vessel in case that the Buyer and the Builder mutually agree or such repairs seriously affect the operation of the Vessel. Repairs under this Article are guaranteed for the balance of the period set out in paragraph (a) of this Article; however, major repairs shall be guaranteed for the longer of (x) the balance of the period set out in paragraph (a) of this Article, or (y) two (2) months from the date of completion of such major repairs, but in no event longer than twenty-six (26) months after the Delivery Date. For purposes of this paragraph, “major repairs” shall be any repair costing more than Thirty Five Thousand United States Dollars (US$ 35,000). If a Guarantee Defect can be repaired or replaced by the Vessel’s crew, the Buyer will give prior notice to the Builder of such defect, and upon the Builder’s acceptance that the Buyer may remedy such defect, the Builder will reimburse the Buyer for the incremental costs of the crew’s labor so incurred, or the cost of such labor at the Builder’s Shipyard, whichever is the lesser, excluding normal maintenance. Guarantee Defects that affect the safety of the Vessel or crew and/or constitute an emergency, shall be repaired either by the crew or the Buyer-selected contractor in a reasonable manner under the circumstances without the Builder’s prior approval, and the Builder shall be notified as soon as possible after the repairs are undertaken and such repair work will be subject to mutual agreement between the parties; provided any such repair work shall not adversely affect any provisions of this Article XIV as to any other Guarantee Defect. In any case, the Builder shall also reimburse the Buyer for the actual cost, in the currency incurred, of any temporary repairs necessary to enable the Vessel to present itself for permanent repairs. Builder’s liability for defects in the Vessel, its machinery, equipment or other appurtenances, shall be as provided in this Article XIV, and the Builder shall be under no obligation for defects in workmanship or contractor supplied materials in any part of the Vessel which have been replaced or in any way repaired by any contractor, unless such contractors have been appointed or approved by the Builder, such appointment or approval not to be unreasonably withheld or delayed. In no event shall the Builder be liable for any consequential damages or for any loss of hire or time in operation on repair of the Vessel. The Parties hereto agree that there are no warranties intended or given, which extend beyond those specified in this Contract, and that the provisions of this Article XIV exclude and negate any warrantee, express or implied (including any implied warranty of merchantability or fitness for particular purpose), or other or responsibility or liability imposed by law, statute, or otherwise with respect to the Vessel. (b) For the detection of any underwater Guarantee Defects, which cannot be detected while the Vessel is afloat, the Buyer at its expense may drydock the Vessel within the Guarantee Period. The Buyer shall pay, at its expense, the haul day and lay days required to accomplish the Vessel’s normal drydocking maintenance. However, if any underwater Guarantee Defects are discovered, and the correction of which requires additional drydocking time, the Builder, in addition to the cost of correcting Guarantee Defects, shall also pay the drydocking charge for the additional days spent in the drydock, if any. Alternatively, the Buyer may choose to conduct an underwater survey in lieu of drydocking within the Guarantee Period to determine if any defects exist as to any area of the Vessel, which is below the waterline for the Vessel. If any underwater Guarantee Defects are found, the Builder shall make pay to correct the defects at Vessel’s first drydocking. In addition to remedying the Guarantee Defects, the Builder shall pay the drydocking charge for each additional day beyond those needed for routine maintenance. The Buyer shall notify the Builder of the time and place of any drydocking or underwater survey for the purpose of discovery of underwater Guarantee Defects so that the Builder may attend at its own expense, if it so desires. Notwithstanding the foregoing, if at any time during Guarantee Period it becomes necessary repairs or replacements to rectify drydock the Vessel for correction of any Guarantee Defects, the cost of the entire drydocking as well as the cost of remedying Guarantee Defects or damage to the Vessel caused as a direct and immediate consequence of such Guarantee Defects. Such repairs and replacements shall be made at the Shipyard at expense of the Builder’s cost and expense; provided that if any work is carried out for the Buyer during such drydocking, the Buyer shall pay the drydocking charge for the additional days spend in the drydock, if any. (c) The Buyer shall notify the Builder in writing, or by facsimile, of any defects for which claim is made under this Guarantee within a reasonable time after the discovery thereof. The Buyer’s written notice shall describe in detail the nature and ascertainable cause and extent of the defects. The Builder shall in any event have the right to arrange for the necessary repairs to rectify no obligation in respect of any Guarantee Defects or damage to the Vessel caused as a direct and immediate consequence defects, unless notice of such Guarantee Defects to be made elsewhere or obtain any necessary replacement parts and materials: (i) if it defects is impractical to bring the Vessel to the Shipyard; or (ii) if received by the Builder cannot supply necessary replacement parts and materials without impairing or delaying later than fourteen (14) days after the operation or working expiry of the VesselGuarantee Period. (d) In the event that the Buyer makes the necessary repairs or replacements at any other shipyard or works other than the Shipyard, the Buyer shall first, but as soon as possible, give the Builder notice of the time and place such repairs will be made. The Builder shall have the right, without prejudice, to inspect through its own representative the nature and extent of the Guarantee Defects to be replaced or repaired. The Buyer shall provide the necessary assistance to the Builder to enable the Builder to board the Vessel to perform the necessary inspections at a time to be mutually agreed, taking into consideration the intent not to impair or delay the operation of the Vessel. The Builder shall, in such case, promptly advise the Buyer in writing, after such examination has been completed, of its acceptance or rejection of such Guarantee Defects as ones that are covered by the guarantee. (i) The Builder shall pay the Buyer in the currencies stated in Box 9 the reasonable documented cost and expenses of such repairs or replacements, provided that the Buyer shall use reasonable endeavors to keep such costs as low as reasonably possible. (ii) Where applicable, the Buyer shall return replaced parts to the Builder at the BuilderUpon Buyer’s request and cost and expense provided the Builder makes such request at the time of the replacement. In the event that they are the subject of a dispute under Clause 42 (Dispute Resolution), the Builder shall hold the replaced parts available for inspection by the Buyer. Upon their replacement, the ownership of replaced parts shall revert assign a “Guarantee Engineer” to the Builder. (e) In any caseVessel, the Vessel who shall be taken, at the Buyer’s cost, to the place elected, ready in all respects for such repairs or replacement. (f) The Builder guarantees repairs or replacements to the Vessel made under sub-clause (b) above for an additional Guarantee Period of the number of months stated in Box 21 from the date of completion of such repairs or replacements provided such work has been performed by the Builder or its Sub-contractors. The additional Guarantee Period shall, however, not end on a date earlier than the end of the original Guarantee Period for any such item. However the total Guarantee Period shall not exceed 24 months after Vessel delivery. (g) If, as a result of the guarantee works, the Vessel has been lying idle continuously for a period in excess of thirty (30) days, the Guarantee Period shall be extended by the total number of such days (counting from the first day the Vessel is idle) that fall within the Guarantee Period, whether or not other work was carried out during such period. (h) Without prejudice to any other rights the Buyer may have under this Contract, following the expiry of the Guarantee Period or in the event that the Builder is in breach of its obligation to rectify Guarantee Defects in accordance fully conversant with this Clause, the Builder shall at the Buyer’s request assign (to the extent to which it may validly do so) to the Buyer, or as the Buyer may direct, the right, title and interest of the Builder in and to all guarantees or warranties given by the Sub-contractors or suppliers of any of the materials or equipment used in the construction of the Vessel. (i) Upon delivery of the Vessel the Builder shall also provide the Buyer with a guarantee issued by the party named in Box 32 (or if Box 32 is not filled in, a bank guarantee from a first class international bank acceptable to the Buyer) substantially in the form and substance set out in Annex A(iii) for 5 % of the Contract Price, as security for the Builder’s obligations under Clause 35 (the "Warranty Guarantee"). (j) The Builder shall have no liability under this Clause 35 for defects or malfunction in the Vessel caused by normal wear and tear, or due to perils of the sea, rivers or navigation, or fire or accidents at sea, or by mismanagement or negligence or willful neglect in the use and maintenance of the Vessel or alteration or addition on machinery, for a period of three (3) months following Delivery. At the part option of the Buyer, its employees or agentsthe Buyer may request the services of the Guarantee Engineer for an additional period of up to six (6) months beyond the initial three (3) months. While said Guarantee Engineer shall remain the employee of the Builder, including he shall sign the Vessel’s Articles, be accorded the status of chief engineer, and shall receive from the Buyer free lodging, board, medical care, and communication services equal to one of the Vessel’s officers, crew and passengersif required, free passage to Korea. Further The Buyer shall pay to the Builder for the services of the Guarantee Engineer the sum of Five Thousand United States Dollars (US$5,000) per month as compensation for the services of the Guarantee Engineer. The detailed terms and conditions on assignment of the Guarantee Engineer shall not be liable for repairs the subject of a separate agreement to be executed on or replacements carried out by before the Buyer or others (i.e. repairs or replacements which have not been carried out by the Builder or its subcontractors) save where such repairs or replacements have been carried out in accordance with Clause 35(d)date of Delivery.

BUILDER’S GUARANTEE. (a) The Builder shall guarantee the Vessel against any Defects (see Definitions) provided such Defects are: (i) discovered within in accordance with the number terms and conditions of months stated in Box 20 this Contract (hereinafter called the “Guarantee”). If, within twenty-four (24) months, or such longer period as might be specified with respect to certain equipment or machinery in the Specifications or in this Article XIV (hereinafter called the “Guarantee Period”) after delivery the Delivery and Acceptance of the Vessel, any defect in the Vessel (except the Buyer-furnished Equipment), its design, machinery, equipment, or other appurtenances, due to defective materials or workmanship, or failure to construct in accordance conformity with Clause 28 the Plans and Specifications (Delivery); and (ii) notice thereof is given all hereinafter referred to the Builder as soon as reasonably possible after the discovery thereof and latest thirty (30) running days after the expiry of the Guarantee Period describing such Defects so far as reasonably practical (hereinafter called “Guarantee Defects”), shall be discovered (other than defects solely due to normal wear and tear, negligence or improper acts of the operator or crew of said Vessel, or overloading, improper loading, stowage, and accident), the Builder shall as quickly as possible after receipt of the Buyer’s written notice thereof, correct, replace, or repair such defect at its own expense at its Shipyard; provided that if, in the Buyer’s opinion, the Vessel cannot conveniently be brought to the Shipyard, and if no other agreement can be reached between the Parties, the Builder shall pay to the Buyer the reasonable cost of making repairs or replacements in a first class shipyard, at the prices prevailing at the time such repairs or replacements are made. The ballast tank coatings shall be guaranteed for twenty-four (24) months after Delivery by the Builder and for a further thirty-six (36) months by the paint manufacturer. Builder guarantees the cargo containment system against any design or construction defect or failure for sixty (60) months after Delivery. Replacement parts or materials to be furnished to the Buyer by Builder for making of repairs under this Guarantee which are performed other than at the Shipyard or in such other facility of the Builder shall be transported to the place of repair at the Builder’s expense. In principle, such transportation shall be by the most expeditious public surface transportation. If required to keep the Vessel in operation, the Builder shall arrange for and bear the cost of transporting necessary parts or materials by air transportation. The Builder shall in every case use its best efforts to expedite the furnishing to the Buyer of replacement parts or materials required under this Guarantee. Technicians and specialists necessary to perform repairs under the Guarantee are to be furnished by the Builder at the Builder’s expense, including transportation costs to and from the Vessel in case that the Buyer and the Builder mutually agree or such repairs seriously affect the operation of the Vessel. Repairs under this Article are guaranteed for the balance of the period set out in paragraph (a) of this Article; however, major repairs shall be guaranteed for the longer of (x) the balance of the period set out in paragraph (a) of this Article, or (y) two (2) months from the date of completion of such major repairs, but in no event longer than twenty-six (26) months after the Delivery Date. For purposes of this paragraph, “major repairs” shall be any repair costing more than Thirty Five Thousand United States Dollars (US$35,000). If a Guarantee Defect can be repaired or replaced by the Vessel’s crew, the Buyer will give prior notice to the Builder of such defect, and upon the Builder’s acceptance that the Buyer may remedy such defect, the Builder will reimburse the Buyer for the incremental costs of the crew’s labor so incurred, or the cost of such labor at the Builder’s Shipyard, whichever is the lesser, excluding normal maintenance. Guarantee Defects that affect the safety of the Vessel or crew and/or constitute an emergency, shall be repaired either by the crew or the Buyer-selected contractor in a reasonable manner under the circumstances without the Builder’s prior approval, and the Builder shall be notified as soon as possible after the repairs are undertaken and such repair work will be subject to mutual agreement between the parties; provided any such repair work shall not adversely affect any provisions of this Article XIV as to any other Guarantee Defect. In any case, the Builder shall also reimburse the Buyer for the actual cost, in the currency incurred, of any temporary repairs necessary to enable the Vessel to present itself for permanent repairs. Builder’s liability for defects in the Vessel, its machinery, equipment or other appurtenances, shall be as provided in this Article XIV, and the Builder shall be under no obligation for defects in workmanship or contractor supplied materials in any part of the Vessel which have been replaced or in any way repaired by any contractor, unless such contractors have been appointed or approved by the Builder, such appointment or approval not to be unreasonably withheld or delayed. In no event shall the Builder be liable for any consequential damages or for any loss of hire or time in operation on repair of the Vessel. The Parties hereto agree that there are no warranties intended or given, which extend beyond those specified in this Contract, and that the provisions of this Article XIV exclude and negate any warrantee, express or implied (including any implied warranty of merchantability or fitness for particular purpose), or other or responsibility or liability imposed by law, statute, or otherwise with respect to the Vessel. (b) For the detection of any underwater Guarantee Defects, which cannot be detected while the Vessel is afloat, the Buyer at its expense may drydock the Vessel within the Guarantee Period. The Buyer shall pay, at its expense, the haul day and lay days required to accomplish the Vessel’s normal drydocking maintenance. However, if any underwater Guarantee Defects are discovered, and the correction of which requires additional drydocking time, the Builder, in addition to the cost of correcting Guarantee Defects, shall also pay the drydocking charge for the additional days spent in the drydock, if any. Alternatively, the Buyer may choose to conduct an underwater survey in lieu of drydocking within the Guarantee Period to determine if any defects exist as to any area of the Vessel, which is below the waterline for the Vessel. If any underwater Guarantee Defects are found, the Builder shall make pay to correct the defects at Vessel’s first drydocking. In addition to remedying the Guarantee Defects, the Builder shall pay the drydocking charge for each additional day beyond those needed for routine maintenance. The Buyer shall notify the Builder of the time and place of any drydocking or underwater survey for the purpose of discovery of underwater Guarantee Defects so that the Builder may attend at its own expense, if it so desires. Notwithstanding the foregoing, if at any time during Guarantee Period it becomes necessary repairs or replacements to rectify drydock the Vessel for correction of any Guarantee Defects, the cost of the entire drydocking as well as the cost of remedying Guarantee Defects or damage to the Vessel caused as a direct and immediate consequence of such Guarantee Defects. Such repairs and replacements shall be made at the Shipyard at expense of the Builder’s cost and expense; provided that if any work is carried out for the Buyer during such drydocking, the Buyer shall pay the drydocking charge for the additional days spend in the dry doc k, if any. (c) The Buyer shall notify the Builder in writing, or by facsimile, of any defects for which claim is made under this Guarantee within a reasonable time after the discovery thereof. The Buyer’s written notice shall describe in detail the nature and ascertainable cause and extent of the defects. The Builder shall in any event have the right to arrange for the necessary repairs to rectify no obligation in respect of any Guarantee Defects or damage to the Vessel caused as a direct and immediate consequence defects, unless notice of such Guarantee Defects to be made elsewhere or obtain any necessary replacement parts and materials: (i) if it defects is impractical to bring the Vessel to the Shipyard; or (ii) if received by the Builder cannot supply necessary replacement parts and materials without impairing or delaying later than fourteen (14) days after the operation or working expiry of the VesselGuarantee Period. (d) In the event that the Buyer makes the necessary repairs or replacements at any other shipyard or works other than the Shipyard, the Buyer shall first, but as soon as possible, give the Builder notice of the time and place such repairs will be made. The Builder shall have the right, without prejudice, to inspect through its own representative the nature and extent of the Guarantee Defects to be replaced or repaired. The Buyer shall provide the necessary assistance to the Builder to enable the Builder to board the Vessel to perform the necessary inspections at a time to be mutually agreed, taking into consideration the intent not to impair or delay the operation of the Vessel. The Builder shall, in such case, promptly advise the Buyer in writing, after such examination has been completed, of its acceptance or rejection of such Guarantee Defects as ones that are covered by the guarantee. (i) The Builder shall pay the Buyer in the currencies stated in Box 9 the reasonable documented cost and expenses of such repairs or replacements, provided that the Buyer shall use reasonable endeavors to keep such costs as low as reasonably possible. (ii) Where applicable, the Buyer shall return replaced parts to the Builder at the BuilderUpon Buyer’s request and cost and expense provided the Builder makes such request at the time of the replacement. In the event that they are the subject of a dispute under Clause 42 (Dispute Resolution), the Builder shall hold the replaced parts available for inspection by the Buyer. Upon their replacement, the ownership of replaced parts shall revert assign a “Guarantee Engineer” to the Builder. (e) In any caseVessel, the Vessel who shall be taken, at the Buyer’s cost, to the place elected, ready in all respects for such repairs or replacement. (f) The Builder guarantees repairs or replacements to the Vessel made under sub-clause (b) above for an additional Guarantee Period of the number of months stated in Box 21 from the date of completion of such repairs or replacements provided such work has been performed by the Builder or its Sub-contractors. The additional Guarantee Period shall, however, not end on a date earlier than the end of the original Guarantee Period for any such item. However the total Guarantee Period shall not exceed 24 months after Vessel delivery. (g) If, as a result of the guarantee works, the Vessel has been lying idle continuously for a period in excess of thirty (30) days, the Guarantee Period shall be extended by the total number of such days (counting from the first day the Vessel is idle) that fall within the Guarantee Period, whether or not other work was carried out during such period. (h) Without prejudice to any other rights the Buyer may have under this Contract, following the expiry of the Guarantee Period or in the event that the Builder is in breach of its obligation to rectify Guarantee Defects in accordance fully conversant with this Clause, the Builder shall at the Buyer’s request assign (to the extent to which it may validly do so) to the Buyer, or as the Buyer may direct, the right, title and interest of the Builder in and to all guarantees or warranties given by the Sub-contractors or suppliers of any of the materials or equipment used in the construction of the Vessel. (i) Upon delivery of the Vessel the Builder shall also provide the Buyer with a guarantee issued by the party named in Box 32 (or if Box 32 is not filled in, a bank guarantee from a first class international bank acceptable to the Buyer) substantially in the form and substance set out in Annex A(iii) for 5 % of the Contract Price, as security for the Builder’s obligations under Clause 35 (the "Warranty Guarantee"). (j) The Builder shall have no liability under this Clause 35 for defects or malfunction in the Vessel caused by normal wear and tear, or due to perils of the sea, rivers or navigation, or fire or accidents at sea, or by mismanagement or negligence or willful neglect in the use and maintenance of the Vessel or alteration or addition on machinery, for a period of three (3) months following Delivery. At the part option of the Buyer, its employees or agentsthe Buyer may request the services of the Guarantee Engineer for an additional period of up to six (6) months beyond the initial three (3) months, including While said Guarantee Engineer shall remain the employee of the Builder, he shall sign the Vessel’s Articles, be accorded the status of chief engineer, and shall receive from the Buyer free lodging, board, medical care, and communication services equal to one of the Vessel’s officers, crew and passengersif required, free passage to Korea. Further The Buyer shall pay to the Builder for the services of the Guarantee Engineer the sum of Five Thousand United States Dollars (US$5,000) per month as compensation for the services of the Guarantee Engineer. The detailed terms and conditions on assignment of the Guarantee Engineer shall not be liable for repairs the subject of a separate agreement to be executed on or replacements carried out by before the Buyer or others (i.e. repairs or replacements which have not been carried out by the Builder or its subcontractors) save where such repairs or replacements have been carried out in accordance with Clause 35(d)date of Delivery.

BUILDER’S GUARANTEE. (a) The Builder shall guarantee the Vessel against any Defects (see Definitions) provided such Defects are: (i) discovered within in accordance with the number terms and conditions of months stated in Box 20 this Contract (hereinafter called the “Guarantee”). If, within twenty-four (24) months, or such longer period as might be specified with respect to certain equipment or machinery in the Specifications or in this Article XIV (hereinafter called the “Guarantee Period”) after delivery the Delivery and Acceptance of the Vessel, any defect in the Vessel (except the Buyer-furnished Equipment), its design, machinery, equipment, or other appurtenances, due to defective materials or workmanship, or failure to construct in accordance conformity with Clause 28 the Plans and Specifications (Delivery); and (ii) notice thereof is given all hereinafter referred to the Builder as soon as reasonably possible after the discovery thereof and latest thirty (30) running days after the expiry of the Guarantee Period describing such Defects so far as reasonably practical (hereinafter called “Guarantee Defects”), shall be discovered (other than defects solely due to normal wear and tear, negligence or improper acts of the operator or crew of said Vessel, or overloading, improper loading, stowage, and accident), the Builder shall as quickly as possible after receipt of the Buyer’s written notice thereof, correct, replace, or repair such defect at its own expense at its Shipyard; provided that if, in the Buyer’s opinion, the Vessel cannot conveniently be brought to the Shipyard, and if no other agreement can be reached between the Parties, the Builder shall pay to the Buyer the reasonable cost of making repairs or replacements in a first class shipyard, at the prices prevailing at the time such repairs or replacements are made. The ballast tank coatings shall be guaranteed for twenty-four (24) months after Delivery by the Builder and for a further thirty-six (36) months by the paint manufacturer. Builder guarantees the cargo containment system against any design or construction defect or failure for sixty (60) months after Delivery. Replacement parts or materials to be furnished to the Buyer by Builder for making of repairs under this Guarantee which are performed other than at the Shipyard or in such other facility of the Builder shall be transported to the place of repair at the Builder’s expense. In principle, such transportation shall be by the most expeditious public surface transportation. If required to keep the Vessel in operation, the Builder shall arrange for and bear the cost of transporting necessary parts or materials by air transportation. The Builder shall in every case use its best efforts to expedite the furnishing to the Buyer of replacement parts or materials required under this Guarantee. Technicians and specialists necessary to perform repairs under the Guarantee are to be furnished by the Builder at the Builder’s expense, including transportation costs to and from the Vessel in case that the Buyer and the Builder mutually agree or such repairs seriously affect the operation of the Vessel. Repairs under this Article are guaranteed for the balance of the period set out in paragraph (a) of this Article; however, major repairs shall be guaranteed for the longer of (x) the balance of the period set out in paragraph (a) of this Article, or (y) two (2) months from the date of completion of such major repairs, but in no event longer than twenty-six (26) months after the Delivery Date. For purposes of this paragraph, “major repairs” shall be any repair costing more than Thirty Five Thousand United States Dollars (US$35,000). If a Guarantee Defect can be repaired or replaced by the Vessel’s crew, the Buyer will give prior notice to the Builder of such defect, and upon the Builder’s acceptance that the Buyer may remedy such defect, the Builder will reimburse the Buyer for the incremental costs of the crew’s labor so incurred, or the cost of such labor at the Builder’s Shipyard, whichever is the lesser, excluding normal maintenance. Guarantee Defects that affect the safety of the Vessel or crew and/or constitute an emergency, shall be repaired either by the crew or the Buyer-selected contractor in a reasonable manner under the circumstances without the Builder’s prior approval, and the Builder shall be notified as soon as possible after the repairs are undertaken and such repair work will be subject to mutual agreement between the parties; provided any such repair work shall not adversely affect any provisions of this Article XIV as to any other Guarantee Defect. In any case, the Builder shall also reimburse the Buyer for the actual cost, in the currency incurred, of any temporary repairs necessary to enable the Vessel to present itself for permanent repairs. Builder’s liability for defects in the Vessel, its machinery, equipment or other appurtenances, shall be as provided in this Article XIV, and the Builder shall be under no obligation for defects in workmanship or contractor supplied materials in any part of the Vessel which have been replaced or in any way repaired by any contractor, unless such contractors have been appointed or approved by the Builder, such appointment or approval not to be unreasonably withheld or delayed. In no event shall the Builder be liable for any consequential damages or for any loss of hire or time in operation on repair of the Vessel. The Parties hereto agree that there are no warranties intended or given, which extend beyond those specified in this Contract, and that the provisions of this Article XIV exclude and negate any warrantee, express or implied (including any implied warranty of merchantability or fitness for particular purpose), or other or responsibility or liability imposed by law, statute, or otherwise with respect to the Vessel. (b) For the detection of any underwater Guarantee Defects, which cannot be detected while the Vessel is afloat, the Buyer at its expense may drydock the Vessel within the Guarantee Period. The Buyer shall pay, at its expense, the haul day and lay days required to accomplish the Vessel’s normal drydocking maintenance. However, if any underwater Guarantee Defects are discovered, and the correction of which requires additional drydocking time, the Builder, in addition to the cost of correcting Guarantee Defects, shall also pay the drydocking charge for the additional days spent in the drydock, if any. Alternatively, the Buyer may choose to conduct an underwater survey in lieu of drydocking within the Guarantee Period to determine if any defects exist as to any area of the Vessel, which is below the waterline for the Vessel. If any underwater Guarantee Defects are found, the Builder shall make pay to correct the defects at Vessel’s first drydocking. In addition to remedying the Guarantee Defects, the Builder shall pay the drydocking charge for each additional day beyond those needed for routine maintenance. The Buyer shall notify the Builder of the time and place of any drydocking or underwater survey for the purpose of discovery of underwater Guarantee Defects so that the Builder may attend at its own expense, if it so desires. Notwithstanding the foregoing, if at any time during Guarantee Period it becomes necessary repairs or replacements to rectify drydock the Vessel for correction of any Guarantee Defects, the cost of the entire drydocking as well as the cost of remedying Guarantee Defects or damage to the Vessel caused as a direct and immediate consequence of such Guarantee Defects. Such repairs and replacements shall be made at the Shipyard at expense of the Builder’s cost and expense; provided that if any work is carried out for the Buyer during such drydocking, the Buyer shall pay the drydocking charge for the additional days spend in the dry dock, if any. (c) The Buyer shall notify the Builder in writing, or by facsimile, of any defects for which claim is made under this Guarantee within a reasonable time after the discovery thereof. The Buyer’s written notice shall describe in detail the nature and ascertainable cause and extent of the defects. The Builder shall in any event have the right to arrange for the necessary repairs to rectify no obligation in respect of any Guarantee Defects or damage to the Vessel caused as a direct and immediate consequence defects, unless notice of such Guarantee Defects to be made elsewhere or obtain any necessary replacement parts and materials: (i) if it defects is impractical to bring the Vessel to the Shipyard; or (ii) if received by the Builder cannot supply necessary replacement parts and materials without impairing or delaying later than fourteen (14) days after the operation or working expiry of the VesselGuarantee Period. (d) In the event that the Buyer makes the necessary repairs or replacements at any other shipyard or works other than the Shipyard, the Buyer shall first, but as soon as possible, give the Builder notice of the time and place such repairs will be made. The Builder shall have the right, without prejudice, to inspect through its own representative the nature and extent of the Guarantee Defects to be replaced or repaired. The Buyer shall provide the necessary assistance to the Builder to enable the Builder to board the Vessel to perform the necessary inspections at a time to be mutually agreed, taking into consideration the intent not to impair or delay the operation of the Vessel. The Builder shall, in such case, promptly advise the Buyer in writing, after such examination has been completed, of its acceptance or rejection of such Guarantee Defects as ones that are covered by the guarantee. (i) The Builder shall pay the Buyer in the currencies stated in Box 9 the reasonable documented cost and expenses of such repairs or replacements, provided that the Buyer shall use reasonable endeavors to keep such costs as low as reasonably possible. (ii) Where applicable, the Buyer shall return replaced parts to the Builder at the BuilderUpon Buyer’s request and cost and expense provided the Builder makes such request at the time of the replacement. In the event that they are the subject of a dispute under Clause 42 (Dispute Resolution), the Builder shall hold the replaced parts available for inspection by the Buyer. Upon their replacement, the ownership of replaced parts shall revert assign a “Guarantee Engineer” to the Builder. (e) In any caseVessel, the Vessel who shall be taken, at the Buyer’s cost, to the place elected, ready in all respects for such repairs or replacement. (f) The Builder guarantees repairs or replacements to the Vessel made under sub-clause (b) above for an additional Guarantee Period of the number of months stated in Box 21 from the date of completion of such repairs or replacements provided such work has been performed by the Builder or its Sub-contractors. The additional Guarantee Period shall, however, not end on a date earlier than the end of the original Guarantee Period for any such item. However the total Guarantee Period shall not exceed 24 months after Vessel delivery. (g) If, as a result of the guarantee works, the Vessel has been lying idle continuously for a period in excess of thirty (30) days, the Guarantee Period shall be extended by the total number of such days (counting from the first day the Vessel is idle) that fall within the Guarantee Period, whether or not other work was carried out during such period. (h) Without prejudice to any other rights the Buyer may have under this Contract, following the expiry of the Guarantee Period or in the event that the Builder is in breach of its obligation to rectify Guarantee Defects in accordance fully conversant with this Clause, the Builder shall at the Buyer’s request assign (to the extent to which it may validly do so) to the Buyer, or as the Buyer may direct, the right, title and interest of the Builder in and to all guarantees or warranties given by the Sub-contractors or suppliers of any of the materials or equipment used in the construction of the Vessel. (i) Upon delivery of the Vessel the Builder shall also provide the Buyer with a guarantee issued by the party named in Box 32 (or if Box 32 is not filled in, a bank guarantee from a first class international bank acceptable to the Buyer) substantially in the form and substance set out in Annex A(iii) for 5 % of the Contract Price, as security for the Builder’s obligations under Clause 35 (the "Warranty Guarantee"). (j) The Builder shall have no liability under this Clause 35 for defects or malfunction in the Vessel caused by normal wear and tear, or due to perils of the sea, rivers or navigation, or fire or accidents at sea, or by mismanagement or negligence or willful neglect in the use and maintenance of the Vessel or alteration or addition on machinery, for a period of three (3) months following Delivery. At the part option of the Buyer, its employees or agentsthe Buyer may request the services of the Guarantee Engineer for an additional period of up to six (6) months beyond the initial three (3) months. While said Guarantee Engineer shall remain the employee of the Builder, including he shall sign the Vessel’s Articles, be accorded the status of chief engineer, and shall receive from the Buyer free lodging, board, medical care, and communication services equal to one of the Vessel’s officers, crew and passengersif required, free passage to Korea. Further The Buyer shall pay to the Builder for the services of the Guarantee Engineer the sum of Five Thousand United States Dollars (US$5,000) per month as compensation for the services of the Guarantee Engineer. The detailed terms and conditions on assignment of the Guarantee Engineer shall not be liable for repairs the subject of a separate agreement to be executed on or replacements carried out by before the Buyer or others (i.e. repairs or replacements which have not been carried out by the Builder or its subcontractors) save where such repairs or replacements have been carried out in accordance with Clause 35(d)date of Delivery.

BUILDER’S GUARANTEE. (a) The Builder shall guarantee the Vessel against any Defects (see Definitions) provided such Defects are: (i) discovered within in accordance with the number terms and conditions of months stated in Box 20 this Contract (hereinafter called the “Guarantee”). If, within twenty-four (24) months, or such longer period as might be specified with respect to certain equipment or machinery in the Specifications or in this Article XIV (hereinafter called the “Guarantee Period”) after delivery the Delivery and Acceptance of the Vessel, any defect in the Vessel (except the Buyer-furnished Equipment), its design, machinery, equipment, or other appurtenances, due to defective materials or workmanship, or failure to construct in accordance conformity with Clause 28 the Plans and Specifications (Delivery); and (ii) notice thereof is given all hereinafter referred to the Builder as soon as reasonably possible after the discovery thereof and latest thirty (30) running days after the expiry of the Guarantee Period describing such Defects so far as reasonably practical (hereinafter called “Guarantee Defects”), shall be discovered (other than defects solely due to normal wear and tear, negligence or improper acts of the operator or crew of said Vessel, or overloading, improper loading, stowage, and accident), the Builder shall as quickly as possible after receipt of the Buyer’s written notice thereof, correct, replace, or repair such defect at its own expense at its Shipyard; provided that if, in the Buyer’s opinion, the Vessel cannot conveniently be brought to the Shipyard, and if no other agreement can be reached between the Parties, the Builder shall pay to the Buyer the reasonable cost of making repairs or replacements in a first class shipyard, at the prices prevailing at the time such repairs or replacements are made. The ballast tank coatings shall be guaranteed for twenty-four (24) months after Delivery by the Builder and for a further thirty-six (36) months by the paint manufacturer. Builder guarantees the cargo containment system against any design or construction defect or failure for sixty (60) months after Delivery. Replacement parts or materials to be furnished to the Buyer by Builder for making of repairs under this Guarantee which are performed other than at the Shipyard or in such other facility of the Builder shall be transported to the place of repair at the Builder’s expense. In principle, such transportation shall be by the most expeditious public surface transportation. If required to keep the Vessel in operation, the Builder shall arrange for and bear the cost of transporting necessary parts or materials by air transportation. The Builder shall in every case use its best efforts to expedite the furnishing to the Buyer of replacement parts or materials required under this Guarantee. Technicians and specialists necessary to perform repairs under the Guarantee are to be furnished by the Builder at the Builder’s expense, including transportation costs to and from the Vessel in case that the Buyer and the Builder mutually agree or such repairs seriously affect the operation of the Vessel. Repairs under this Article are guaranteed for the balance of the period set out in paragraph (a) of this Article; however, major repairs shall be guaranteed for the longer of (x) the balance of the period set out in paragraph (a) of this Article, or (y) two (2) months from the date of completion of such major repairs, but in no event longer than twenty-six (26) months after the Delivery Date. For purposes of this paragraph, “major repairs” shall be any repair costing more than Thirty Five Thousand United States Dollars (US$35,000). If a Guarantee Defect can be repaired or replaced by the Vessel’s crew, the Buyer will give prior notice to the Builder of such defect, and upon the Builder’s acceptance that the Buyer may remedy such defect, the Builder will reimburse the Buyer for the incremental costs of the crew’s labor so incurred, or the cost of such labor at the Builder’s Shipyard, whichever is the lesser, excluding normal maintenance. Guarantee Defects that affect the safety of the Vessel or crew and/or constitute an emergency, shall be repaired either by the crew or the Buyer-selected contractor in a reasonable manner under the circumstances without the Builder’s prior approval, and the Builder shall be notified as soon as possible after the repairs are undertaken and such repair work will be subject to mutual agreement between the parties; provided any such repair work shall not adversely affect any provisions of this Article XIV as to any other Guarantee Defect. In any case, the Builder shall also reimburse the Buyer for the actual cost, in the currency incurred, of any temporary repairs necessary to enable the Vessel to present itself for permanent repairs. Builder’s liability for defects in the Vessel, its machinery, equipment or other appurtenances, shall be as provided in this Article XIV, and the Builder shall be under no obligation for defects in workmanship or contractor supplied materials in any part of the Vessel which have been replaced or in any way repaired by any contractor, unless such contractors have been appointed or approved by the Builder, such appointment or approval not to be unreasonably withheld or delayed. In no event shall the Builder be liable for any consequential damages or for any loss of hire or time in operation on repair of the Vessel. The Parties hereto agree that there are no warranties intended or given, which extend beyond those specified in this Contract, and that the provisions of this Article XIV exclude and negate any warrantee, express or implied (including any implied warranty of merchantability or fitness for particular purpose), or other or responsibility or liability imposed by law, statute, or otherwise with respect to the Vessel. (b) For the detection of any underwater Guarantee Defects, which cannot be detected while the Vessel is afloat, the Buyer at its expense may drydock the Vessel within the Guarantee Period. The Buyer shall pay, at its expense, the haul day and lay days required to accomplish the Vessel’s normal drydocking maintenance. However, if any underwater Guarantee Defects are discovered, and the correction of which requires additional drydocking time, the Builder, in addition to the cost of correcting Guarantee Defects, shall also pay the drydocking charge for the additional days spent in the drydock, if any. Alternatively, the Buyer may choose to conduct an underwater survey in lieu of drydocking within the Guarantee Period to determine if any defects exist as to any area of the Vessel, which is below the waterline for the Vessel. If any underwater Guarantee Defects are found, the Builder shall make pay to correct the defects at Vessel’s first drydocking. In addition to remedying the Guarantee Defects, the Builder shall pay the drydocking charge for each additional day beyond those needed for routine maintenance. The Buyer shall notify the Builder of the time and place of any drydocking or underwater survey for the purpose of discovery of underwater Guarantee Defects so that the Builder may attend at its own expense, if it so desires. Notwithstanding the foregoing, if at any time during Guarantee Period it becomes necessary repairs or replacements to rectify drydock the Vessel for correction of any Guarantee Defects, the cost of the entire drydocking as well as the cost of remedying Guarantee Defects or damage to the Vessel caused as a direct and immediate consequence of such Guarantee Defects. Such repairs and replacements shall be made at the Shipyard at expense of the Builder’s cost and expense; provided that if any work is carried out for the Buyer during such drydocking, the Buyer shall pay the drydocking charge for the additional days spend in the dry dock, if any. (c) The Buyer shall notify the Builder in writing, or by facsimile, of any defects for which claim is made under this Guarantee within a reasonable time after the discovery thereof. The Buyer’s written notice shall describe in detail the nature and ascertainable cause and extent of the defects. The Builder shall in any event have the right to arrange for the necessary repairs to rectify no obligation in respect of any Guarantee Defects or damage to the Vessel caused as a direct and immediate consequence defects, unless notice of such Guarantee Defects to be made elsewhere or obtain any necessary replacement parts and materials: (i) if it defects is impractical to bring the Vessel to the Shipyard; or (ii) if received by the Builder cannot supply necessary replacement parts and materials without impairing or delaying later than fourteen (14) days after the operation or working expiry of the VesselGuarantee Period. (d) In the event that the Buyer makes the necessary repairs or replacements at any other shipyard or works other than the Shipyard, the Buyer shall first, but as soon as possible, give the Builder notice of the time and place such repairs will be made. The Builder shall have the right, without prejudice, to inspect through its own representative the nature and extent of the Guarantee Defects to be replaced or repaired. The Buyer shall provide the necessary assistance to the Builder to enable the Builder to board the Vessel to perform the necessary inspections at a time to be mutually agreed, taking into consideration the intent not to impair or delay the operation of the Vessel. The Builder shall, in such case, promptly advise the Buyer in writing, after such examination has been completed, of its acceptance or rejection of such Guarantee Defects as ones that are covered by the guarantee. (i) The Builder shall pay the Buyer in the currencies stated in Box 9 the reasonable documented cost and expenses of such repairs or replacements, provided that the Buyer shall use reasonable endeavors to keep such costs as low as reasonably possible. (ii) Where applicable, the Buyer shall return replaced parts to the Builder at the BuilderUpon Buyer’s request and cost and expense provided the Builder makes such request at the time of the replacement. In the event that they are the subject of a dispute under Clause 42 (Dispute Resolution), the Builder shall hold the replaced parts available for inspection by the Buyer. Upon their replacement, the ownership of replaced parts shall revert assign a “Guarantee Engineer” to the Builder. (e) In any caseVessel, the Vessel who shall be taken, at the Buyer’s cost, to the place elected, ready in all respects for such repairs or replacement. (f) The Builder guarantees repairs or replacements to the Vessel made under sub-clause (b) above for an additional Guarantee Period of the number of months stated in Box 21 from the date of completion of such repairs or replacements provided such work has been performed by the Builder or its Sub-contractors. The additional Guarantee Period shall, however, not end on a date earlier than the end of the original Guarantee Period for any such item. However the total Guarantee Period shall not exceed 24 months after Vessel delivery. (g) If, as a result of the guarantee works, the Vessel has been lying idle continuously for a period in excess of thirty (30) days, the Guarantee Period shall be extended by the total number of such days (counting from the first day the Vessel is idle) that fall within the Guarantee Period, whether or not other work was carried out during such period. (h) Without prejudice to any other rights the Buyer may have under this Contract, following the expiry of the Guarantee Period or in the event that the Builder is in breach of its obligation to rectify Guarantee Defects in accordance fully conversant with this Clause, the Builder shall at the Buyer’s request assign (to the extent to which it may validly do so) to the Buyer, or as the Buyer may direct, the right, title and interest of the Builder in and to all guarantees or warranties given by the Sub-contractors or suppliers of any of the materials or equipment used in the construction of the Vessel. (i) Upon delivery of the Vessel the Builder shall also provide the Buyer with a guarantee issued by the party named in Box 32 (or if Box 32 is not filled in, a bank guarantee from a first class international bank acceptable to the Buyer) substantially in the form and substance set out in Annex A(iii) for 5 % of the Contract Price, as security for the Builder’s obligations under Clause 35 (the "Warranty Guarantee"). (j) The Builder shall have no liability under this Clause 35 for defects or malfunction in the Vessel caused by normal wear and tear, or due to perils of the sea, rivers or navigation, or fire or accidents at sea, or by mismanagement or negligence or willful neglect in the use and maintenance of the Vessel or alteration or addition on machinery, for a period of three (3) months following Delivery. At the part option of the Buyer, its employees or agentsthe Buyer may request the services of the Guarantee Engineer for an additional period of up to six (6) months beyond the initial three (3) months, including While said Guarantee Engineer shall remain the employee of the Builder, he shall sign the Vessel’s Articles, be accorded the status of chief engineer, and shall receive from the Buyer free lodging, board, medical care, and communication services equal to one of the Vessel’s officers, crew and passengersif required, free passage to Korea. Further The Buyer shall pay to the Builder for the services of the Guarantee Engineer the sum of Five Thousand United States Dollars (US$5,000) per month as compensation for the services of the Guarantee Engineer. The detailed terms and conditions on assignment of the Guarantee Engineer shall not be liable for repairs the subject of a separate agreement to be executed on or replacements carried out by before the Buyer or others (i.e. repairs or replacements which have not been carried out by the Builder or its subcontractors) save where such repairs or replacements have been carried out in accordance with Clause 35(d)date of Delivery.