Common use of Restrictions on the Buyer Clause in Contracts

Restrictions on the Buyer. 3.1 The Buyer and the Charterer hereby give notice to the Builder and the Security Trustee, and the Builder and the Security Trustee hereby each acknowledge, that pursuant to the Master Agreement the Buyer has agreed that it shall not, except with the prior consent of the Charterer: (a) except by way of assignment in favour of the Security Trustee pursuant to the Pre-Delivery Security Assignment, transfer, novate or assign or agree to transfer, novate or assign any of its rights or obligations under the Shipbuilding Contract or the Refund Guarantee other than to the Charterer; or (b) except for a Permitted Encumbrance, place or permit to exist any Encumbrance on the Shipbuilding Contract or the Refund Guarantee or on any of the Buyer’s rights thereunder; or (c) release the Builder from any of its duties and liabilities under the Shipbuilding Contract or waive any breach of any of the said duties and liabilities or consent to any such act or omission of the Builder which would otherwise constitute such a breach; or (d) waive any right of the Buyer under the Shipbuilding Contract or agree to any concessions being made to the Builder under the Shipbuilding Contract (including, without limitation permission for the Builder to perform any building work at the Builder’s factories in China); or (e) amend or vary the Shipbuilding Contract or the Specifications; or (f) agree to defer the remedy of any defect or deficiency in the Vessel until after delivery of the Vessel under the Shipbuilding Contract; provided, however, that the foregoing shall not prevent the Buyer from agreeing on the deferral of the remedy of any defects or deficiencies which are minor or insubstantial; or (g) except upon giving the Charterer prior written notice as required under the Master Agreement: (i) consent or agree to the cancellation, rescission or other termination of the Shipbuilding Contract; or (ii) exercise or permit or suffer to be exercised any right which the Buyer may have to cancel, rescind or otherwise terminate the Shipbuilding Contract or claim that the Shipbuilding Contract has become frustrated or exercise any rights or remedies upon the occurrence of a Builder default under the Shipbuilding Contract or the occurrence of any event entitling the Buyer to terminate the Shipbuilding Contract; or (iii) fail to exercise any right or take any action that would prevent such cancellation, rescission or other termination; or (h) exercise or permit or suffer to be exercised any right which the Buyer may have to postpone or advance the time for delivery of the Vessel under the Shipbuilding Contract; or (i) consent to any assignment or transfer by the Builder of any of its rights or obligations under the Shipbuilding Contract; or (j) agree to any amendment of or variation to the Refund Guarantee; or (k) release the Refund Guarantor from any of its duties and liabilities under the Refund Guarantee or waive any breach of any of the said duties and liabilities or consent to any such act or omission of a guarantor which would otherwise constitute such a breach. 3.2 As between the Buyer and the Charterer, the provisions of Clause 3.1 take effect subject to the provisions of the Master Agreement, provided that, where the Charterer’s consent is required as referred to in Clause 3.1: (a) neither the Builder nor the Security Trustee shall be bound to enquire whether the conditions of the Master Agreement which are applicable to the giving or withholding of such consent by the Charterer, or which provide for the deemed giving of such consent by the Charterer, have or have not been satisfied; and (b) neither the Builder nor the Security Trustee shall be entitled to assume that the Buyer has obtained such consent of the Charterer, or that such consent is deemed to have been given by the Charterer, unless the Charterer has confirmed this in writing to it. 3.3 The Charterer confirms that at the date of this Agreement it has not received any notice of any assignment or transfer by the Buyer of any of its rights or obligations under the Shipbuilding Contract or the Refund Guarantee, other than in favour of the Security Trustee pursuant to the Pre-Delivery Security Assignment. 3.4 The provisions of Clause 3.1 are in addition to and without prejudice to the provisions of the notices of assignment in respect of the Pre-Delivery Security Assignment referred to in Clause 2.2. As between the Buyer and the Security Trustee, the provisions of such notices of assignment take effect subject to the provisions of the Pre-Delivery Security Assignment, provided that, where the Security Trustee’s consent is required for any matter as referred to in the notices of assignment: (a) neither the Builder nor the Charterer shall be bound to enquire whether the conditions of the Pre-Delivery Security Assignment which are applicable to the giving or withholding of such consent by the Security Trustee[, or which provide for the deemed giving of such consent by the Security Trustee,] have or have not been satisfied; and (b) neither the Builder nor the Charterer shall be entitled to assume that the Buyer has obtained such consent of the Security Trustee[, or that such consent is deemed to have been given by the Security Trustee,] unless the Security Trustee has confirmed this in writing to it.