Common use of EFFECT OF BUYER’S DEFAULT ON OR BEFORE THE DELIVERY OF THE VESSEL Clause in Contracts

EFFECT OF BUYER’S DEFAULT ON OR BEFORE THE DELIVERY OF THE VESSEL. If the Buyer shall be in default of its obligations as provided in Paragraph (a) above under this Contract and shall fail to remedy such breach within fifteen (15) days of receiving written notice thereof from the Builder (unless the Buyer disputes that there is such a breach and has referred the matter to arbitration) then: (i) The Delivery Date of the Vessel shall be extended automatically for the actual period of such default and the Builder shall not be obliged to pay any liquidated damages for the delay in delivery of the Vessel caused thereby. (ii) The Buyer shall pay to the Builder interest at the rate of six percent (6%) per annum in respect of the instalment payment so in default for the whole period of default commencing with the first day of default and lasting to the date of actual receipt by the Builder of the full amount of such instalment. (iii) If the Buyer is in default in payment of any of the instalment(s) due and payable prior to or simultaneously with the delivery of the Vessel, the Builder shall, in writing or by e-mail or telefax, notify the Buyer to that effect, and the Buyer shall upon receipt of such notification, forthwith acknowledge in writing or by e-mail or telefax to the Builder that such notification has been received. If the said default of the Buyer continues for a period of ten (10) working days after the Builder’s notification to the Buyer of such default, the Builder may, at its option, cancel this Contract by serving upon the Buyer a letter, an e-mail or a telefax notice of cancellation. (iv) In the event of such cancellation by the Builder of this Contract due to the Buyer’s default in payment of the first, second, third, fourth or fifth instalment, the Builder shall be entitled to retain and apply the instalments already paid by the Buyer to the recovery of the Builder’s expenses due to the Buyer’s default and the cancellation of this Contract and at the same time the Builder shall have the full right and power either to complete or not to complete the Vessel which is the sole property of the Builder as it deems fit, and to sell the Vessel by private sale either in a complete or in an incomplete state, provided always that the Builder shall (i) act in a prudent and reasonable manner to mitigate the extent of any damages caused by the Buyer’s default and (ii) provide the Buyer with a seven (7)-working day advance notice in writing that such sale is planned. The sale of the Vessel as above provided shall be made by the Builder upon such terms and conditions as the Builder may deem fit provided that (i) the Builder shall use all reasonable endeavours to secure the best price obtainable, (ii) the sale is on an arms-length basis and not to a connected or affiliated company shall be without prejudice to any right of the Builder to recover proved damages from the Buyer consequent upon such default of the Buyer. The proceeds received by the Builder from the sale shall be applied in addition to the retained instalment(s) by the Builder as mentioned hereinabove as follows: FIRST, in payment of all reasonable costs and expenses of the sale of the Vessel, including interest thereon at six percent (6%) per annum from the respective date of payment of such costs and expenses aforesaid to the date of sale on account of the Buyer’s default. SECOND, if the Vessel has been completed, in or towards satisfaction of the unpaid balance of the Contract Price, to which shall be added the cost of all additional work and extras agreed in writing by the Buyer including interest thereon at six percent (6%) per annum from the respective due date of the instalment in default to the date of sale, or if the Vessel has not been completed, in or towards satisfaction of the unpaid amount of the cost incurred by the Builder prior to the date of sale on account of construction of the Vessel, including work, labour, materials and reasonably estimated profit, which the Builder would have been entitled to receive if the Vessel had been completed and delivered plus interest thereon at six percent (6%) per annum from the respective due date of the instalment in default to the date of sale. THIRD, the balance of the proceeds, if any, shall belong to the Buyer, and shall forthwith be paid over to the Buyer by the Builder without interest, provided, however, that the amount of such payment to the Buyer shall in no event exceed the total amount of Instalments already paid by the Buyer and the cost of the Buyer’s Supplies, if any. In the event of the proceeds from the sale together with instalment(s) retained by the Builder being insufficient to pay the Builder, the Buyer shall be liable for the deficiency and shall pay the same to the Builder upon its demand.

EFFECT OF BUYER’S DEFAULT ON OR BEFORE THE DELIVERY OF THE VESSEL. If the Buyer shall be in default of its obligations as provided in Paragraph (a) above under this Contract and shall fail to remedy such breach within fifteen (15) days of receiving written notice thereof from the Builder (unless the Buyer disputes that there is such a breach and has referred the matter to arbitration) then: (i) The Delivery Date of the Vessel shall be extended automatically for the actual period of such default and the Builder shall not be obliged to pay any liquidated damages for the delay in delivery of the Vessel caused thereby. (ii) The Buyer shall pay to the Builder interest at the rate of six percent (6%) per annum in respect of the instalment payment so in default for the whole period of default commencing with the first day of default and lasting to the date of actual receipt by the Builder of the full amount of such instalment. (iii) If the Buyer is in default in payment of any of the instalment(s) due and payable prior to or simultaneously with the delivery of the Vessel, the Builder shall, in writing or by e-mail or telefax, notify the Buyer to that effect, and the Buyer shall upon receipt of such notification, forthwith acknowledge in writing or by e-mail or telefax to the Builder that such notification has been received. If the said default of the Buyer continues for a period of ten (10) working days after the Builder’s notification to the Buyer of such default, the Builder may, at its option, cancel this Contract by serving upon the Buyer a letter, an e-mail or a telefax notice of cancellation. (iv) In the event of such cancellation by the Builder of this Contract due to the Buyer’s default in payment of the first, second, third, fourth or fifth instalment, the Builder shall be entitled to retain and apply the instalments already paid by the Buyer to the recovery of the Builder’s expenses due to the Buyer’s default and the cancellation of this Contract and at the same time the Builder shall have the full right and power either to complete or not to complete the Vessel which is the sole property of the Builder as it deems fit, and to sell the Vessel by private sale either in a complete or in an incomplete state, provided always that the Builder shall (i) act in a prudent and reasonable manner to mitigate the extent of any damages caused by the Buyer’s default and (ii) provide the Buyer with a seven (7)-working day advance notice in writing that such sale is planned. The sale of the Vessel as above provided shall be made by the Builder upon such terms and conditions as the Builder may deem fit provided that (i) the Builder shall use all reasonable endeavours to secure the best price obtainable, (ii) the sale is on an arms-length basis and not to a connected or affiliated company shall be without prejudice to any right of the Builder to recover proved damages from the Buyer consequent upon such default of the Buyer. The proceeds received by the Builder from the sale shall be applied in addition to the retained instalment(s) by the Builder as mentioned hereinabove as follows: FIRST, in payment of all reasonable costs and expenses of the sale of the Vessel, including interest thereon at six percent (6%) per annum from the respective date of payment of such costs and expenses aforesaid to the date of sale on account of the Buyer’s default. SECOND, if the Vessel has been completed, in or towards satisfaction of the unpaid balance of the Contract Price, to which shall be added the cost of all additional work and extras agreed in writing by the Buyer including interest thereon at six percent (6%) per annum from the respective due date of the instalment in default to the date of sale, or if the Vessel has not been completed, in or towards satisfaction of the unpaid amount of the cost incurred by the Builder prior to the date of sale on account of construction of the Vessel, including work, labour, materials and reasonably estimated profit, which the Builder would have been entitled to receive if the Vessel had been completed and delivered plus interest thereon at six percent (6%) per annum from the respective due date of the instalment in default to the date of sale. THIRD, the balance of the proceeds, if any, shall belong to the Buyer, and shall forthwith be paid over to the Buyer by the Builder without interest, provided, however, that the amount of such payment to the Buyer shall in no event exceed the total amount of Instalments already paid by the Buyer and the cost of the Buyer’s Supplies, if any. In the event of the proceeds from the sale together with instalment(s) retained by the Builder being insufficient to pay the Builder, the Buyer shall be liable for the deficiency and shall pay the same to the Builder upon its demand.