EXHIBIT 10(h)
SHIPBUILDING CONTRACT
BETWEEN
XXX. X. XXXXX GMBH
AND
SHIP VENTURES INC.
AND
ARRASAS LIMITED
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IN RELATION TO HULL NO. S.668
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FIRST ORIGINAL
CONTENTS
CLAUSE PAGE
Article 1: Subject matter of Contract........................................................................ 1
1. Agreement to build, sell and purchase............................................................... 1
2. Description of the Ship............................................................................. 2
3. Specification and Plans............................................................................. 3
4. Classification...................................................................................... 4
5. Builder's right to subcontract...................................................................... 5
6. Buyer's Supplies.................................................................................... 6
7. Builder's tally of Buyer's Supplies................................................................. 8
Article 2: Supervision....................................................................................... 9
1. Supervisor.......................................................................................... 9
2. Plan approval...................................................................................... 10
3. Work approval...................................................................................... 11
4. Planned Programme.................................................................................. 12
5. Minor alterations.................................................................................. 12
6. Technical disputes................................................................................. 13
Article 3: Modifications.................................................................................... 14
1. Modifications...................................................................................... 14
2. Classification and regulatory changes.............................................................. 14
3. Substitution of Parts.............................................................................. 15
Article 4: Title and insurances............................................................................. 16
1. Title, risk and encumbrances....................................................................... 16
2. Insurances......................................................................................... 18
3. Loss or damage..................................................................................... 19
Article 5: Permissible delays............................................................................... 21
1. Extension of time for building work................................................................ 21
2. Delay notices...................................................................................... 23
Article 6: Tests and liquidated damages..................................................................... 24
1. Tests.............................................................................................. 24
2. Liquidated damages................................................................................. 26
Article 7: Delivery and guarantee........................................................................... 32
1. Delivery and acceptance............................................................................ 32
2. Guarantee.......................................................................................... 35
FIRST ORIGINAL
Article 8: Contract Price and payment terms................................................................. 40
1. Contract Price..................................................................................... 40
2. Payments........................................................................................... 40
Article 9: Termination...................................................................................... 43
1. Termination by Builder............................................................................. 43
2. Termination by Buyer............................................................................... 44
3. Termination by either party........................................................................ 46
Article 10: Builder's representations, covenants and indemnities............................................ 47
1. Representations, warranties and covenants.......................................................... 47
2. Indemnities........................................................................................ 47
Article 11: Intellectual property rights.................................................................... 49
1. Patents, trade marks and copyrights................................................................ 49
2. Rights to engineering and design data.............................................................. 50
Article 12: Taxes and contract expenses..................................................................... 51
1. Taxes.............................................................................................. 51
2. Contract expenses.................................................................................. 51
Article 13: Disputes........................................................................................ 52
1. Technical disputes................................................................................. 52
2. Arbitration........................................................................................ 53
3. Governing law...................................................................................... 54
4. Notices............................................................................................ 54
Article 14: General matters................................................................................. 56
1. Computation of time................................................................................ 56
2. Assignments........................................................................................ 56
3. Partial illegality................................................................................. 57
4. Confidentiality.................................................................................... 57
5. Amendments......................................................................................... 57
6. No waiver.......................................................................................... 57
7. Consents........................................................................................... 57
8. Language........................................................................................... 58
9. Models............................................................................................. 58
10. Counterparts....................................................................................... 58
11. Effective Date..................................................................................... 58
12. Protected Parties.................................................................................. 59
13. Guarantee.......................................................................................... 59
FIRST ORIGINAL
SCHEDULE.................................................................................................... 60
1. Definition of certain terms........................................................................ 60
2. Interpretation of certain references............................................................... 63
3. Priority of Contract, Plans and Specification...................................................... 64
First Original
THIS SHIPBUILDING CONTRACT is dated as of 15 September 2003 and made between:
(1) XXX.X.XXXXX GMBH, a company organised and existing under the laws of
Germany, and having its principal office at Xxxxxxxxxxxxxxx Xxx, X-00000
Xxxxxxxxx, Xxxxxxx (the "BUILDER"); and
(2) SHIP VENTURES INC., a Delaware corporation having its registered office at
0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxx of Xxxxxxxxx, Xxxxxxxx 00000,
Xxxxxx Xxxxxx of America (the "BUYER"); and
(3) ARRASAS LIMITED, a company incorporated in the Isle of Man and having its
registered office at Xxxxxxxxxxxxx Xxxxx, Xxxxxx Xxxx, Xxxxxxxx Road,
Xxxxxxx, Isle of Man, British Isles ("ARRASAS").
NOW IT IS HEREBY AGREED as follows:
ARTICLE 1: SUBJECT MATTER OF CONTRACT
1. AGREEMENT TO BUILD, SELL AND PURCHASE
1.1 On and subject to the provisions of this Contract, the Plans and the
Specification:-
(i) the Builder shall:
(a) design, engineer, build, launch, equip and outfit the Ship at
the Shipyard, and
(b) provide all components, equipment, gear, fittings, machinery,
materials, parts, plant, outfit, spares and supplies,
including the shipbuilding materials manufactured and
processed in the United States of America referred to in
clause 3.3, which are necessary to achieve the objects and
purposes described in clause 1.1(i) (a) (the "Parts") other
than the specified supplies to be provided by the Buyer (the
"Buyer's Supplies"), and
(c) complete, finish, sell and deliver the Ship to the Buyer at a
North European sea port (the "DELIVERY PORT") selected by the
Builder and approved by the Buyer (such approval not to be
unreasonably withheld or delayed) after successful performance
and completion of the tests relating to the Ship; and
(ii) the Buyer shall purchase and accept delivery of the duly completed
Ship at the Delivery Port.
1.2 The Builder, as a first class shipbuilder with a reputation for excellence
and with knowledge of the Buyer's performance and quality requirements and
standards shall ensure that all building work shall be carried out in a
good and workmanlike manner and in accordance with the highest
shipbuilding and marine engineering practices and standards for new
passenger cruise ships, and so that (unless specified to the contrary in
the Specification) the quality of workmanship, quality of materials and
aesthetic design of the passenger cabins and public areas shall not be
lower than the corresponding quality standards on m.v. Norwegian Xxxx.
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First Original
2. Description of The Ship
2.1 The Ship shall be a luxury passenger cruise ship suitable for continuous
year-round worldwide cruising, with the following main dimensions and
characteristics:
(i) Dimensions
Length overall about - 294.13 metres
Length between perpendiculars: - 264.80 meters
Breadth moulded - 32.20 metres
Depth bulkhead deck - 11.50 metres
Design draft - 8.30 metres
*In this paragraph "about" means a tolerance of +/- 1 metre
(ii) Deadweight
Guaranteed deadweight at a draft of 8.30 metres - 7,500 metric tons
in sea water of 1.025 t/m3 density (and under the conditions further
described in section G.2.3 of the Specification).
(iii) Passenger Cabins
Garden Villas - 2
Executive suites - 4
Junior suites - 20
Studio - 20
Deluxe - 132
Standard outside with balcony - 352
Standard outside - 234
Standard inside - 399
Handicapped - 25
(iv) Crew Cabins
Captain class - 7
Officer, single occupancy - 54
Xxxxx officers - 52
Crew, two (2) berth - 93
Crew, four (4)berth - 81
Crew, six (6) berth - 118
(v) Life Saving Equipment
Total number of persons on board for the purposes of long
international voyages - 4,000.
(vi) Machinery
Diesel engines 4 x MAN B&W 12V 48/60 B each capable of a
maximum continuous rating of 14,400 kW at
514 rpm (or equivalent)
Pod units 2 pod units each developing 19,500 kW at
approximately 150 rpm
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First Original
(vii) Speed
The trial speed of the Ship at a draft of [***] [Confidential
Treatment] shall be at least [***] [Confidential Treatment] under
the conditions specified in Section G.2.5 of the Specification.
2.2 The details of the dimensions and characteristics referred to in clause
2.1 above, as well as the definitions and method of measurements and
calculations, are as indicated in the Specification and no changes shall
be made to such dimensions and characteristics without the Buyer's prior
written approval.
2.3 The hull number of the Ship will be S.668 and that number shall in
accordance with clause 1.1 and 1.2 in Article 4 be placed upon the Ship
and the Parts during construction.
3. Specification And Plans
3.1 The Specification and the Plans describe in detail building work
standards, the features of the building work and the general scope of the
building work but, although the contents of the Specification and the
Plans are believed by the Builder and the Buyer to be accurate, all
dimensions and other details shall be independently verified and checked
by the Builder and, if there are any errors or omissions in the
Specification or Plans which may adversely affect the safety,
seaworthiness or technical performance of the Ship, the Builder shall
correct the same, after first notifying the Buyer in writing and obtaining
the Buyer's written approval (which is not to be unreasonably withheld),
without any increase in the Contract Price.
3.2 The Builder shall be solely and directly responsible for all aspects of
the design, performance and quality of the building work, and the fact
that any calculations, measurements, drawings, plans, test results or any
other documents and data relating to the building work shall have been
made, prepared or supplied by the Buyer or shown to the Buyer or approved
by the Buyer and/or any Regulatory Authority and/or the Classification
Bodies and/or any other specified person(s) or that modifications or
alterations shall have been carried out in accordance with the Buyer's
requirements shall not in any manner or to any extent relieve the Builder
from (or otherwise reduce) any of the Builder's obligations and/or
liabilities under this Contract.
3.3 The Builder has purchased from the Buyer various shipbuilding materials,
which were manufactured and processed in the United States of America for
use in Xxxxxxx Shipbuilding, Inc.'s Hull No.7672 under the construction
contract described in section 8109 of the Department of Defense
Appropriation Act for the Fiscal Year 1998 (Public Law 105-56), for use in
the construction of the Ship. Otherwise, all Parts shall be new or (with
the Supervisor's prior written approval which shall not be unreasonably
withheld) unused, of high quality, and in strict and full accordance and
compliance with this Contract, the Plans and the Specification and shall
otherwise be in strict and full accordance and compliance with the
Builder's usual high standards and practices of construction for similar
ships. The materials to be used for certain components are stated in the
Specification.
3.4 The Builder shall pay for all Parts promptly on or before delivery of the
Ship or in accordance with usual commercial credit terms.
3.5 The Builder shall furnish: spare parts in accordance with the
Specification; and maintenance tools of the kind and in at least the
quantities required by the Specification,
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First Original
the Classification Society, and the maker's standards, for items furnished
by the Builder. The cost of such spares and tools are included in the
Contract Price. The Builder at its own cost and risk shall be responsible
for the handling, storing and bringing on board the Ship of all spares and
tools. Spares and tools furnished by the Builder shall be properly
protected against physical decay, corrosion and mechanical damage and
shall be properly listed so that replacements may be readily ordered by
the Buyer.
4. Classification
4.1 The Builder shall build the Ship under the supervision and special survey
of the Classification Bodies in accordance with the regulations,
requirements, resolutions and rules of the Classification Bodies (the
"Class Rules") that are (i) in force as of the Effective Date and (ii)
announced as of the Effective Date as intended thereafter to come into
force or to be implemented, so that on delivery the Ship achieves the
class notation DNV + 1A1 Passenger Vessel, ECO, CLEAN and ABS + A1
Passenger Vessel E, + AMS, + ACC free of all conditions, notations,
qualifications, recommendations, reservations and restrictions.
4.2 The Classification Bodies' decision as to compliance or non-compliance of
the building work with the Class Rules shall be final and binding on the
parties but this provision shall not in any manner or to any extent
relieve the Builder from (or otherwise reduce) any of the Builder's
obligations to comply with this Contract, the Plans and the Specification
in respect of requirements that exceed the Class Rules.
4.3 The Ship shall also be designed and built under the supervision and in
accordance with the regulations, requirements, resolutions and rules of
the Regulatory Authorities (the "Regulatory Rules") as well as all other
specified regulations, requirements, resolutions and rules that, are (i)
in force as of the Effective Date and (ii) announced as of the Effective
Date as intended thereafter to come into force or to be implemented.
4.4 The decision of any Regulatory Authority which is to issue specified
certificates shall be final and binding on the parties as to compliance or
non-compliance of the building work with the relevant Regulatory Rules but
this provision shall not in any manner or to any extent relieve the
Builder from (or otherwise reduce) any of the Builder's obligations to
comply with this Contract, the Plans or the Specification in respect of
requirements which exceed the Regulatory Rules.
4.5 All classification, certification, testing, survey and other fees and
charges payable to the Classification Bodies and other third parties in
relation to the building work shall be for the account of the Builder.
4.6 Although the Classification Bodies will be appointed and paid for by the
Builder, and although the Builder will be exclusively responsible for the
correct interpretation and application of the Class Rules:
(i) the parties intend that, in performing its role in relation to the
building work, the Classification Bodies shall be acting for, and
shall owe identical duties to, both of the parties to this Contract;
and
(ii) the Builder will ensure that the provisions of this clause 4.6 are
communicated to, and accepted by, the Classification Bodies prior to
its appointment under this Contract.
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First Original
4.7 All fees and charges incidental to the registration of the Ship under the
flag and laws of the Flag State shall be for the account of the Buyer.
4.8 In relation to the building work, the Buyer has the right:
(i) to inspect all correspondence, minutes of meetings and other
documents passing between the Builder and the Classification Bodies
and to have copies thereof upon request of the Supervisor or the
Buyer; and
(ii) to attend all scheduled meetings between the Builder and the
Classification Society,
and the Builder shall provide (or procure that the Classification Bodies
provides) copies of all documents requested under paragraph (i) above and
shall keep the Buyer well informed (in advance) of all of the meetings
referred to in paragraph (ii) above. The Builder will promptly inform the
Supervisor of any unscheduled meetings between the Builder and the
Classification Bodies and, if the Supervisor does not attend any of such
meetings, the Builder will give the Supervisor a reasonably detailed
account of the matters discussed and decisions taken at the meeting.
4.9 The Builder and its subcontractors shall comply with all laws, rules and
regulations applicable to the building work, and the Builder shall obtain
all licenses, permits, certificates and permissions required for the
execution and completion of the building work, including those required by
the Classification Bodies and the Regulatory Authorities.
4.10 The Builder shall be responsible for obtaining the approval of all
drawings, calculations and other necessary matters by the Classification
Bodies and the Regulatory Authorities, and shall arrange for all
applicable certificates and approvals to be issued.
5. Builder's Right To Subcontract
5.1 The Builder shall not subcontract the whole of the building work but it
may subcontract the performance of certain parts of the building work to
reputable and suitably qualified and experienced subcontractors provided
that for any major subcontracting the Builder shall obtain the prior
written consent of the Buyer (which consent shall not be unreasonably
withheld), it being agreed that "Major Subcontracting" shall mean any
construction or assembly of the Ship's volume sections or installation of
the Ship's machinery and other main Parts, or any other major building
work, to be done outside the Shipyard unless customarily done outside the
builders' yards in connection with the construction of luxury passenger
ships within the North/Northwest European shipbuilding industry.
5.2 The Builder's appointment, contracting, employment or use of any workmen,
subcontractors, agents and other representatives (including, without
limitation, any such persons appointed or employed or contracted by the
Builder with the Buyer's approval) shall not in any manner or to any
extent relieve the Builder from (or otherwise reduce) any of the Builder's
obligations and/or liabilities under or in connection with this Contract
nor diminish the Builder's responsibility adequately to manage and
supervise such persons and to ensure that they conduct themselves in an
efficient and workmanlike manner and in accordance with the practices and
standards referred to in clauses 1.2.
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FIRST ORIGINAL
5.3 The Builder covenants with the Buyer that:
(i) it shall ensure that there is not and will not be created by the
Builder any direct or indirect contractual or other legal
relationship between the Buyer and any subcontractors appointed or
otherwise used by the Builder (save for such relationships as may be
created by reason of the warranty and guarantee assignments to be
made by the Builder under clause 2.10 of Article 7);
(ii) it shall take reasonable care in the selection, employment,
appointment and supervision of all subcontractors, and shall use its
best endeavours to procure their employment or appointment on the
best possible terms consistent with the Buyer's rights, and the
Builder's obligations and liabilities, under this Contract
including, without limitation, such matters as (a) the best possible
guarantees and warranties and liberty for the Builder to assign all
or any part(s) of such guarantees and warranties to the Buyer, (b)
the safety of passengers and crew, (c) good service, (d) reliability
of subcontractors, and (e) availability of spares and post-delivery
service support;
(iii) it shall prevent its subcontractors from exercising any rights
(including without limitation, any German Law Encumbrance Rights) to
arrest, attach, detain or encumber the Ship, the Parts or any other
of the Buyer's property;
(iv) it shall promptly provide the Buyer with such information and access
as it may require from time to time in order to verify the
performance of the supply and building work carried out by the
Builder's subcontractors;
(v) it shall promptly (a) deal with the Buyer's reasonable complaints
regarding the terms of engagement or contract of any of its
subcontractors, and/or (b) take necessary steps to ensure the proper
performance of any such subcontractors, and/or (c) comply with any
reasonable requests by the Buyer to terminate any such engagement or
contract and appoint a substitute subcontractor or; and
(vi) it shall be fully, directly and solely responsible (as between the
Builder, the Buyer and the other protected parties) for the acts,
omissions and defaults of the Builder's subcontractors (including,
without limitation, any persons appointed, employed or contracted by
the Builder with the approval of the Buyer) and for the acts,
omissions and defaults of the respective officers, employees,
workmen, agents and other representatives of the Builder and its,
subcontractors.
5.4 The Buyer shall have the right to approve the identity of all main
subcontractors other than those specified in the List of Suppliers, such
approval not to be unreasonably withheld.
5.5 All labour costs (including overtime costs) of the Builder and of the
workmen, subcontractors, and others used by the Builder shall be for the
account of the Builder.
6. BUYER'S SUPPLIES
6.1 The Buyer, at its own risk and expense, shall contract for, supply and
deliver the Buyer's Supplies to the Shipyard and, in the case of certain
materials, to the Builder's facility at the base port for trials in proper
condition for installation or incorporation in, or stowage
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FIRST ORIGINAL
on board, the Ship in precise accordance with a delivery schedule to be
agreed between the Buyer and the Builder within one hundred and eighty
(180) days after the Effective Date.
6.2 The Builder shall, at its own risk and expense, receive, check as to
agreement with transport documents, insure (in accordance with clause 2 of
Article 4), safely store and keep well protected, and properly inspect,
put on board and thereafter install or incorporate in or stow on the Ship,
all of the Buyer's Supplies from time to time delivered to the Shipyard,
and (whenever so requested by the Supervisor) the Builder shall also
assist the Buyer to clear any Buyer's Supplies through German customs and
(in relation to the materials which are to be delivered at the base port
for trials) through the relevant customs. Upon request by the Builder, the
Buyer's available personnel at the Shipyard will assist in the
installation of the Buyer's Supplies.
6.3 In order to facilitate the inspection, installation and incorporation of
the Buyer's Supplies by the Builder, the Buyer shall furnish the Builder
with all plans, instruction books, test reports and certificates provided
to the Buyer by its suppliers and, if so requested by the Builder, the
Buyer shall without charge to the Builder cause the relevant suppliers to
assist the Builder in the installation and incorporation of such Buyer's
Supplies at the Shipyard. If any Buyer's Supplies (including any Buyer's
Supplies to be replaced by the Buyer pursuant to this clause 6) have not
been delivered within five (5) working days after the Supervisor's receipt
of a notice from the Builder under clause 6.4(ii), the Builder shall be
entitled to proceed with the construction of the Ship without installing
or incorporating such Supplies in or on the Ship and the lack of any such
installation or incorporation shall not be treated as a Defect in the Ship
provided that if, having regard to the nature and/or expected delivery
date(s) of the relevant Buyer's Supplies and/or the Builder's programme
for the building work, it is reasonable for the Buyer to request the
Builder to arrange the building work so that the relevant Supplies can be
installed or incorporated in or on the Ship at a later date then, in each
such case, the Builder will use its best efforts to accommodate any such
reasonable request.
6.4 The Builder:
(i) shall be liable to the Buyer for any damage to or loss of any
Buyer's Supplies occurring or arising after their delivery by (or on
behalf of) the Buyer under clause 6.1 unless such damage or loss is
caused by the inadequate packing or inherent vice of such Buyer's
Supplies; and
(ii) shall notify the Supervisor as soon as practicable of any loss of,
damage to, or deficiency in the supply or performance of, any of the
Buyer's Supplies or any late delivery thereof in accordance with
clause 6.3.
6.5 Where the Builder is liable to the Buyer (under clause 6.4) for any damage
to or loss of any Buyer's Supplies, the Builder will promptly replace the
relevant Supplies with identical items at its risk and expense; in all
other cases where the Builder gives notice to the Buyer under clause
6.4(ii), the Buyer will promptly replace the relevant Supplies at its risk
and expense.
6.6 Within fifteen (15) days after the Ship has been delivered by the Builder
and accepted by the Buyer in accordance with the provisions of this
Contract, the Buyer will remove from
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FIRST ORIGINAL
the Shipyard any of the Buyer's Supplies which have not been used in the
construction of, or otherwise delivered with, the Ship.
7. BUILDER'S TALLY OF BUYER'S SUPPLIES
7.1 The Builder shall make and keep fully itemised and up-to-date records of
all Buyer's Supplies from time to time delivered to the Shipyard and/or
other premises of the Builder (and/or its subcontractors) and, without
prejudice to the generality of the foregoing, the Builder shall ensure
that such records are made and kept in the form used by the Builder for
its own stocks and show:
(i) the date of delivery to the Builder (or its subcontractors) of each
batch or consignment of Buyer's Supplies;
(ii) where and how such Buyer's Supplies are stored;
(iii) when such Buyer's Supplies are incorporated or installed in, or
stowed on, the Ship; and
(iv) the balance (in units) of any unused Buyer's Supplies.
7.2 The Builder shall provide the Supervisor, on a monthly basis, with a
complete set of the records described in clause 7.1 and all amendments of,
or supplements to, such records.
(END OF ARTICLE 1)
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First Original
ARTICLE 2: SUPERVISION
1. SUPERVISOR
1.1 The Buyer may retain a supervisor (the "Supervisor") and a supervision
team at the Shipyard to maintain close contact with the Builder and, on
behalf of the Buyer, to supervise the building work, and the Builder will
assist the Buyer to obtain any necessary German permissions and
authorisations for the Supervisor and his team to carry out their duties.
1.2 The Supervisor and his team shall at all times be deemed to be the
employees of the Buyer and the Builder shall be under no liability
whatsoever for personal injuries or other harm to, or death of, the
Supervisor or any of his team, or for damage to, or loss or destruction
of, their property, unless such injury, harm, death, damage, loss or
destruction is caused by the negligence and/or wilful default of the
Builder and/or any of the Builder's subcontractors.
1.3 The Supervisor and his team shall carry out their inspections and
supervision in an efficient manner and in such a way as to avoid any
increase in the building costs or delays to the building work.
1.4 All salaries and, subject to clause 1.5, costs and expenses of the
Supervisor and his team shall be for the Buyer's account.
1.5 The Builder shall provide, free of charge to the Buyer, the Supervisor and
the Supervisor's team:
(i) adequately equipped, maintained and serviced changing rooms and
offices in reasonable numbers (including, without limitation,
tables, chairs, filing cabinets, direct call national and
international telephones and telefaxes, word processing workstations
with laser printers in each office all in reasonable numbers, and
one (1) full time secretary) conveniently located in the Shipyard
and in close proximity to the Ship, and
(ii) lodgings in Papenburg (or vicinity) and meals at the Shipyard (as
far as available),
provided that the Builder may charge the Buyer at cost for such lodgings
and meals, for the secretary and for the use by the Supervisor and his
team of the national and international postage, telephone and telefax
services provided by the Builder under this clause 1.5.
1.6 A written statement confirming the Supervisor's appointment and the scope
of his actual authority shall be given by the Buyer to the Builder within
thirty (30) days after the Effective Date. Written notice of revocation of
appointment of the Supervisor and/or any change in the scope of his actual
authority shall be given by the Buyer to the Builder immediately after any
such revocation and/or change has been decided upon by the Buyer.
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1.7 The Supervisor and his team shall be deemed to have notice of and shall
observe the safety, security and other rules and precautions in force from
time to time at the Shipyard and at the premises of the Builder's
sub-contractors.
2. PLAN APPROVAL
2.1 Each of the Builder and the Buyer acknowledges and agrees that the
construction of the Ship requires co-operation and flexibility on the part
of both parties, especially during the design phase.
2.2 Notwithstanding the generality of clause 2.1, the building work shall be
carried out in strict accordance with the provisions of this Contract, the
Specification and the Plans, and prior to commencement of the building
work (and from time to time thereafter as and when the Buyer may request)
the Builder will provide the Supervisor with a work schedule containing a
critical path treatment of the major and significant elements of the
building work, in their proper sequence, which must be completed to ensure
delivery of the Ship by the Delivery Date.
2.3 All plans, drawings and other documents required to be developed and
supplied by the Builder to the Buyer for approval shall be hand-delivered
by the Builder in their proposed final form in three (3) copies to the
Supervisor (or, if the Supervisor is not at the Shipyard at the relevant
time, to any member of the Supervisor's team at the Shipyard unless a
specified member of the team has been nominated by the Supervisor for this
purpose by notice to the Builder and is available at the Shipyard) for the
Buyer's approval, and the Builder agrees to use its best endeavours to
submit all such plans, drawings and documents in such a manner that the
Buyer may reasonably review and approve or comment on the same within the
periods provided for in clauses 2.4 and 2.5.
2.4 Within five (5) working days after the Supervisor's receipt of the plans,
drawings and other documents referred to in clause 2.3, the Supervisor
will notify the Builder in writing whether or not such plans, drawings and
other documents are sufficient to enable the Buyer to review them pursuant
to this clause 2; and if any of the plans, drawings or other documents are
deficient in any way, the Supervisor must specify the deficiency and give
his reasons in such notice.
2.5 Any plans, drawings and other documents submitted to the Supervisor and
accepted by him as being sufficient for the Buyer's review must be
returned to the Builder as soon as practicable and, at the latest, within
fifteen (15) days after the Supervisor's receipt of those plans, drawings
and other documents which the Supervisor has authority to approve on
behalf of the Buyer.
2.6 One copy of all plans, drawings and other documents submitted to the
Supervisor and accepted by him as being sufficient for the Buyer's review
shall be returned to the Builder (in accordance with the timetable laid
down in clause 2.5) either as approved or as rejected by the Buyer
provided that all rejections shall specify with reasons all aspects of the
rejected plans, drawings or documents which do not, or which provide for
building work which does not, conform to the requirements of this
Contract, the Plans or the Specification.
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2.7 If a plan, drawing or other document is approved, the Builder shall
proceed with the building work shown therein.
2.8 If a plan, drawing or other document is not accepted by the Supervisor as
being sufficient for the Buyer's review in accordance with clause 2.4, the
Builder shall promptly alter the relevant plan, drawing or document
without charge to the Buyer and resubmit it as altered for approval by the
Buyer in accordance with clauses 2.3 to 2.6.
2.9 All building work performed by the Builder prior to approval by the Buyer
of all plans, drawings or documents relating to such work shall be at the
sole risk and expense of the Builder.
2.10 If the Buyer (or the Supervisor on the Buyer's behalf) fails to return to
the Builder, in accordance with the timetable laid down in clause 2.5, any
plan or drawing or other document and this failure is not remedied within
two (2) working days after the Supervisor's receipt of a written notice
from the Builder specifying such failure, such plan or drawing or other
document shall be deemed to have been automatically approved by the Buyer
without any comments.
2.11 If the Builder discovers any feature in the Plans or the Specification
which appears to be inconsistent with the general scheme of the building
work or which might (in the reasonable opinion of the Builder) expose the
Builder or the Buyer to any product liabilities, the Builder shall
promptly notify the Supervisor and submit a proposal to the Supervisor for
the Buyer's approval (such approval not to be unreasonably withheld) for
the removal of the inconsistency or risk of product liability at the
Builder's cost and in the Builder's time.
3. WORK APPROVAL
3.1 Throughout the period during which the Ship is being built the Builder
will conduct its usual quality control programme of inspections, testing
and supervision by a team of the Builder's staff specially designated for
this purpose but the building work and all Parts, as the same may at any
time and at any place be completed or be in progress, shall also be
subject to inspection by and the approval of the Buyer (acting through the
Supervisor and his team) and the Classification Society.
3.2 The Builder shall at all times during normal working hours give the
Supervisor and the Supervisor's team free and ready access to (and a free
right to inspect) the Ship and Parts at any place where building work is
being done or tests are being carried out or Parts are being processed or
stored in connection with the building of the Ship including, without
limitation, the Shipyard and other yards, workshops and stores of the
Builder, and the premises of the Builder's subcontractors who are doing
work in connection with the building of the Ship or processing or storing
Parts, and the Builder shall ensure that the provisions of this clause 3.2
are inserted into all subcontracts from time to time made by it in
connection with the building work.
3.3 The Buyer shall be entitled (but not obliged) to reject all building work
and Parts which do not comply with the requirements of this Contract, the
Plans and the Specification unless and to the extent that such
non-compliance is the direct result of the Builder
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seeking to avoid (in a manner approved by the Buyer, such approval not to
be unreasonably withheld) the product liabilities described in clause 2.11
provided that all rejections shall be made in writing, and shall specify
with reasons those aspects of the building work or Parts inspected which
do not comply with the requirements of this Contract, the Plans or the
Specification.
3.4 If any building work or Parts shall be duly rejected by the Buyer as not
complying with the Contract, the Plans or the Specification, the Builder
shall promptly correct or replace such work or Parts at the Builder's cost
and in the Builder's time.
4. PLANNED PROGRAMME
4.1 The Ship shall be constructed in accordance with the planned programme
contained in the Specification which defines certain stages of the
construction process ("Milestones") which must be completed by the dates
therein specified.
4.2 The Builder shall submit to the Buyer each month, commencing on the date
falling one month after the Effective Date, until delivery, the following
documentation (the accuracy of which the Builder hereby warrants):
(a) a status report on the building work as compared with the planned
programme, including the critical path;
(b) a report setting out the actual progress of the building work during
the previous month as compared with the planned programme;
(c) a list of modifications (if any) agreed during the previous month,
including Contract adjustments, if any, agreed during that month;
(d) a report on the delivery of subcontracted materials during the
previous month (the precise nature and form of which report shall be
agreed, from time to time, between the Buyer and the Builder).
4.3 Without prejudice to the Builder's obligations under this Contract, if the
construction of the Ship should, for any reason whatsoever, be delayed
beyond the time-frame indicated in the planned programme, the Builder
shall immediately notify the Buyer. If the delay which has occurred is not
a permissible delay, the Builder shall within fourteen (14) working days
after provision of such notification provide to the Buyer a written
schedule describing the steps (including any appropriate increase in
manpower and material resources) the Builder intends to take to recover
the time lost. The Builder and the Buyer shall meet at the earliest
opportunity to discuss the proposal and the Builder's detailed plans for
implementation of the same.
5. MINOR ALTERATIONS
5.1 Subject to clause 3.2 in Article 1 and to Article 3, approvals and other
decisions of the Buyer in relation to the design and performance of the
building work shall be final and may not be revised or revoked without the
prior written approval of the Builder provided that the Builder shall not
withhold its approval for any minor alterations or revisions requested by
the Buyer which (in the reasonable opinion of the Builder) would not:
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(i) delay or increase the cost of the building work or have a material
adverse affect on the Builder's planning or programme for the
building work; or
(ii) otherwise constitute a material modification of this Contract, the
Plans or the Specification; or
(iii) require the Builder to jeopardise its contracted building
schedule(s) for other ships.
6. TECHNICAL DISPUTES
6.1 If, at any time during the design phase or any other stage of the building
work, there is a difference of opinion between the Builder and the Buyer
in relation to any technical matter, then either party may give a notice
(a "Dispute Notice") to the other party and if the parties do not resolve
the difference of opinion within five (5) working days after the date of
service of the Dispute Notice, the Builder or the Buyer may require that
the difference of opinion be treated as a technical dispute to be resolved
in accordance with clause 1 of Article 13.
(End of article 2)
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ARTICLE 3: MODIFICATIONS
1. MODIFICATIONS
1.1 This Contract, the Plans and the Specification may be modified from time
to time by agreement of the parties provided that any reasonable and
timely modifications requested by the Buyer, and/or any modifications
required to be made under clause 2 which are occasioned by any changes in
the Class Rules or in any of the Regulatory Rules after the Effective
Date, shall be implemented by the Builder if the Buyer assents to
necessary modifications to the Contract Price, the Delivery Date and any
other relevant provisions of this Contract, the Builder agreeing to act in
good faith and use its best efforts to accommodate any such reasonable
requests by the Buyer so that any such modifications shall be made:
(i) at the lowest cost reasonably possible;
(ii) within the shortest period of time reasonably possible; and
(iii) without any loss in the relative priority of the building work for
the Ship compared to other construction work in the Shipyard,
provided that nothing in this clause 1.01 shall require the Builder to
jeopardise its contracted building schedule(s) for other ships.
1.2 Any agreement on a modification of this Contract, the Plans or the
Specification shall include:
(i) any increase or decrease in the Contract Price;
(ii) any change in the Delivery Date, and
(iii) any other adjustment to or amendment of any relevant provisions of
this Contract, the Plans or the Specification,
which is directly, necessarily and reasonably occasioned by such
modification.
1.3 Any agreement on a modification of this Contract, the Plans or the
Specification shall be recorded and evidenced by an exchange of letters or
telefaxes which shall constitute an amendment to this Contract and/or the
Plans and/or the Specification and shall be sequentially numbered, marked
"Contract modification under Clause 3" and signed by the parties duly
authorised representatives, and following any such agreement the Builder
shall modify the building of the Ship in accordance therewith.
1.4 If there is any dispute between the parties as to any of the matters
referred to in clause 1.2 then, if the Buyer so requires, the Builder will
make the requested modification before the dispute has been resolved
provided the Buyer confirms its willingness to pay the amount found due to
the Builder in respect of such modification.
2. CLASSIFICATION AND REGULATORY CHANGES
2.1 If, after the Effective Date, any Class Rules and/or any Regulatory Rules
are changed by the Classification Bodies or any Regulatory Authority, the
Builder shall promptly notify
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the Buyer in writing of the relevant change(s) and of the necessary
modifications to be made to this Contract, the Plans and the
Specification.
2.2 If the Classification Bodies or any Regulatory Authority requires any
change to be made in the design, construction or certification of the Ship
- as compared with the design, construction or certification of Hull
No.S.667 (Bahamas flag) - in order to enable the Ship to comply with the
requirements of the Flag State, the Builder shall promptly notify the
Buyer in writing of the relevant change and of the necessary modifications
to be made to the Contract, the Plans and the Specification.
2.3 If, following its receipt of a notice under clause 2.1 or clause 2.2, the
Buyer reasonably considers that the operation of the Ship in its intended
service would permit of a dispensation or waiver, the Builder will at the
request of the Buyer apply for a dispensation from, or waiver of
compliance with, the relevant change(s).
2.4 If the Buyer does not require the Builder to apply for a dispensation or
waiver (or it has not been possible to obtain a dispensation or waiver)
within a period of fifteen (15) days after the Buyer's receipt of a notice
under clause 2.1 or under clause 2.2 (or such longer period of time as the
parties may agree to be reasonable in the light of all the circumstances
then prevailing), the parties shall make an agreement to modify this
Contract in accordance with clause 1 and thereafter the Builder shall make
the relevant change(s) in the design or building of the Ship.
3. SUBSTITUTION OF PARTS
3.1 If (notwithstanding all reasonable efforts on the part of the Builder and
provided that orders for the same were placed in good time by the Builder)
any Parts are not available at the time required for their installation or
incorporation in the Ship, the Builder may (with the prior written
approval of the Buyer) use suitable substitute Parts which are at least
equal to the standard and quality of the Parts which were not available
and which are capable of meeting all of the requirements of:
(i) this Contract, the Plans and the Specification; and
(ii) the Classification Bodies and the Regulatory Authorities.
3.2 Where a proposed substitution of Parts is approved by the Buyer, the
Builder shall:
(i) bear all additional costs and expenses whatsoever in relation to
such substitution; and
(ii) credit the Buyer with any cost savings occasioned by such
substitution.
(END OF ARTICLE 3)
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FIRST ORIGINAL
ARTICLE 4: TITLE AND INSURANCES
1. TITLE, RISK AND ENCUMBRANCES
1.1 On and from the Effective Date, the Builder (as legal and beneficial
owner) hereby transfers and agrees to transfer to the Buyer (free and
clear of all encumbrances whatsoever) - and the Buyer hereby agrees to
accept such transfer - the Ship, as it is constructed from time to time
including without limitation all of the Builder's ownership and interest
(legal and beneficial) in the appurtenances, components, equipment items,
machinery fittings and all materials of whatsoever kind (whether marked or
not) from time to time intended for the construction of the Ship which the
Builder has acquired or will acquire for this purpose, the agreed and
irrevocable intention of the parties being that from the Effective Date
the Buyer has and shall have full title (free and clear of all
encumbrances whatsoever) to:
(i) the Ship itself as it is in the course of progressive stages of
construction.
(ii) all materials and equipment from time to time appropriated or
allocated for the construction on the Ship, all of which shall be
marked as allocated to hull number S.668 as soon as reasonably
practicable after the Effective Date;
(iii) all parts assembled, fabricated or manufactured from the materials
and equipment referred to above; and
(iv) all other Parts.
All risks in relation to the Ship and all the materials and equipment
referred to above and all other Parts (including delivered Buyer's
Supplies) shall be and remain with the Builder until the Ship is delivered
to and accepted by the Buyer in accordance with Clause 1 in Article 7.
1.2 Immediately upon:
(i) the delivery to the Builder (or any of its subcontractors) of any
Buyer's Supplies; and
(ii) the delivery to, or fabrication by, the Builder (or any of its
subcontractors) of all other Parts,
the Builder shall xxxx (or cause its relevant subcontractors to xxxx) the
same and the Ship (as it is from time to time built) with hull number
S.668.
1.3 The Builder shall have no authority to create (and waives all rights to
create) any encumbrances whatsoever over any of the Buyer's property
(which for all purposes of this Contract shall include the Ship, the
Buyer's Supplies, the Parts and other materials referred to in subclause
1.1 and any other property of the Buyer), nor shall it permit any of its
subcontractors to impose or assert any encumbrances of any kind on or
against any of the Buyer's Property.
1.4 At any time when a payment is due to the Builder under this Contract, and
at all other reasonable times, the Buyer may require the Builder to
provide a written statement
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FIRST ORIGINAL
satisfactory to the Buyer showing what, if any, encumbrances of any kind
(other than permitted encumbrances) have been or are liable to be imposed
on or asserted against any of the Buyer's property.
1.5 If any encumbrance of any kind (other than any permitted encumbrance) is
imposed on or asserted against any of the Buyer's property, the Builder
shall promptly notify the Buyer and shall, not later than ten (10) days
thereafter, secure the discharge or release of such encumbrance provided
that if the Builder desires to contest any such encumbrance and such
discharge or release is not available under law during such contest
(including, without limitation, through the filing of a bond or other
security), the Builder shall immediately take such steps as in the opinion
of the Buyer shall prevent such encumbrance from delaying or otherwise
adversely affecting the building work and shall indemnify fully, hold
harmless and defend the Buyer and all other protected parties from and
against all Losses which any of them may sustain or incur as a result of
the imposition of any such encumbrance.
1.6 Notwithstanding the provisions of clause 1.5, the Buyer may secure the
removal of any such encumbrance in which event the Builder shall reimburse
the Buyer in full for its costs (including legal fees) of securing such
discharge or release by deducting such sum from any payments due or to
become due to the Builder under this Contract save that if any such cost
is in excess of the amount of any such reimbursement by deductions, the
Builder shall pay the amount of such excess to the Buyer promptly upon
demand.
1.7 Notwithstanding the provisions of clause 1.5, the Buyer, without securing
the discharge or release of any such encumbrance, may nevertheless
withhold from any payments due or to become due to the Builder, unless and
until such encumbrance is discharged or released by the Builder, a sum
equal to the amount reasonably determined by the Buyer to be required to
secure the discharge or release of such encumbrance (which amount shall
include the estimated amount of all expenses which might be incurred in
connection therewith, including legal fees).
1.8 Prior to the installation of any of the Buyer's Supplies:
(i) the Builder may require the Buyer to state in writing whether any
permitted encumbrances have been imposed on or asserted against the
relevant Buyer's Supplies and to discharge any such permitted
encumbrances prior to the installation of such Buyer's Supplies, and
if the Buyer fails to discharge any such permitted encumbrances, the
Builder may withhold the installation of the relevant Buyer's
Supplies in which case any resulting delays will be the Buyer's
responsibility; and
(ii) the Buyer may require the Builder to confirm in writing that the
representations made by it in Article 10, clause 1.2(ii) remain in
all respects true and accurate and to procure that the Builder's
financiers confirm in writing to the Buyer that they have no grounds
for making (nor any expectation of acquiring grounds for making) any
claims against the Builder or the Ship, and if the Builder or its
financiers fails to deliver any such statement, the Buyer may
require the Builder to withhold the installation of the relevant
Buyer's Supplies in which case any resulting delays will be the
Builder's responsibility.
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First Original
1.9 Until delivery and acceptance of the Ship under and in accordance with
this Contract, the parties agree that:
(i) as a substitute for the transfer of physical possession to the
Buyer, the Builder will have actual possession (unmittelbarer
Besitz) of the Ship, the Parts and delivered Buyer's Supplies and
will keep the same in safe custody for the Buyer (and free of charge
to the Buyer); and
(ii) and the Buyer will have constructive possession (mittelbarer Besitz)
of the Ship, the Parts and delivered Buyer's Supplies until the
Buyer takes delivery thereof or obtains possession thereof in
accordance with this Contract.
2. INSURANCES
2.1 During the currency of this Contract and until her delivery to the Buyer
the Ship, all Parts, and all Buyers' Supplies (up to a maximum aggregate
value of (euro)25,000,000 (twenty five million euro) delivered to the
Builder (or any of its subcontractors), shall be at the sole, direct and
entire risk of the Builder which shall at its own expense keep the same
insured on terms, and with brokers and underwriters, approved by the Buyer
and its financiers in respect of and against all usual building risks,
including protection and indemnity risks, tests risks and war risks. All
premiums and deductibles shall be for the sole account of the Builder.
Neither the brokers nor the underwriters shall have any rights of recourse
against the Buyer or the Ship, or any rights to make any deduction,
set-off or other withholding from or against any sum payable to the Buyer
in connection with the Insurances.
2.2 The amount of the insurances (the "Insurances") to be arranged by the
Builder under this Article shall be not less than the Contract Price.
2.3 All Insurances shall be taken out by the Builder naming the Buyer as the
assured party and the Builder as the co-insured party for their respective
interests. The Insurances shall contain loss payable provisions reasonably
acceptable to the Buyer and its financiers.
2.4 All Insurances shall provide that there shall be no recourse against the
Buyer or its assignees for the payment of any premiums or commissions and
that no cancellation of the Insurances, for any reason whatsoever, shall
become effective unless and until fourteen (14) days prior written notice
has been given by the relevant brokers or insurers to the Buyer.
2.5 The Builder shall supply the Buyer prior to the commencement of
construction of the Ship with an original cover note specifying the terms
of the Insurances and security (which shall be as usual for the London
insurance market) for the Ship.
2.6 If at any time there is:
(i) any lapse in the insurance coverage which the Builder is required to
arrange under this clause 2, the Buyer may effect replacement
coverage at the Builder's expense; or
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First Original
(ii) any failure by the Builder to pay any premiums due in respect of the
Insurances, the Buyer may pay the same and recover the relevant
payment(s) from the Builder.
3. LOSS OR DAMAGE
3.1 In the event of any partial loss of the Ship before delivery:
(i) the loss shall be made good by the Builder as soon as reasonably
possible, the Delivery Date shall be extended in accordance with
clause 1 in Article 5 (provided that the cause of the partial loss
is excused under that clause) and the partial loss proceeds
referable to the Ship and/or Parts (other than Buyer's Supplies)
subject to the partial loss shall be applied by the Builder in
making good the partial loss to the approval of the Buyer, the
Classification Bodies and the Regulatory Authorities; and
(ii) the partial loss proceeds referable to any Buyer's Supplies subject
to the partial loss shall be paid to the Buyer.
3.2 In the event of the total loss of the Ship before delivery, either the
Builder or the Buyer shall be entitled to terminate this Contract by
written notice to the other, such notice to be delivered within thirty
(30) days after the date (the "Determination Date") on which it is
determined that the Ship has become a total loss pursuant to clause 3.6
below.
3.3 If, following the total loss of the Ship, neither party terminates this
Contract pursuant to clause 3.2, the Builder shall proceed with the
building of the Ship in accordance with this Contract and the Delivery
Date shall be extended in accordance with clause 1 in Article 5 provided
that the cause of the total loss is excused under that clause.
3.4 If there is a total loss of the Ship before delivery, then:-
(i) if either party elects to terminate this Contract pursuant to clause
3.2, the Builder shall within ninety (90) days from (and including)
the Determination Date pay to the Buyer an amount equal to the sum
of:
(a) all payments previously made by the Buyer to the Builder under
this Contract together with interest thereof at the relevant
rate calculated from the date on which the Builder received
each such payment to the date on which the reimbursement is
received by the Buyer, and
(b) the Buyer's Supply Costs in respect of any Buyer's Supplies
which are subject to the total loss; or
(ii) if neither party terminates this Contract pursuant to clause 3.2,
the Builder shall within ninety (90) days from (and including) the
Determination Date pay to the Buyer the Buyer's Supply Costs in
respect of any Buyer's Supplies which are subject to the total loss.
3.5 To the extent that amounts are paid to the Buyer under clause 3.4, any
insurance proceeds received on that account shall be paid to the Builder.
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FIRST ORIGINAL
3.6 A total loss shall be deemed to have occurred:
(i) if it consists of an actual loss, at noon Papenburg time on the
actual date of loss; or
(ii) if it consists of a constructive or compromised or arranged or
agreed total loss, at noon Papenburg time on the date on which
notice of abandonment of the Ship is given to her insurers or (if
her insurers do not admit the claim for a total loss) at the time on
the date at which a total loss is subsequently adjudged to have
occurred by a competent court or arbitration tribunal or liability
in respect thereof as a total loss is admitted by underwriters.
(END OF ARTICLE 4)
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FIRST ORIGINAL
ARTICLE 5: PERMISSIBLE DELAYS
1. EXTENSION OF TIME FOR BUILDING WORK
1.1 If the Builder gives notice as provided in clauses 2.1, 2.2 and 2.3 the
Builder shall be entitled to an extension of the Delivery Date but only
if:
(i) there is a specific cause of delay which the Builder can prove will
solely and directly delay delivery of the Ship beyond the Delivery
Date and which cause is delaying or will delay building work which
is in the critical path of delivery of the Ship for more than one
working day;
(ii) such cause of delay is one of the excusable causes set out in clause
1.3;
(iii) the Builder proves that it has used and is continuing to use all
reasonable efforts to avoid, prevent, minimise and overcome the
actual delay in delivery of the Ship including, without limitation,
by the performance of other or additional building work provided
that such other or additional building work does not jeopardise the
Builder's contracted obligations for the construction of other
ships; and
(iv) but for such cause of delay the Ship would have been delivered on
time,
provided that the length of any such extension shall be the number of days
by which the Builder can prove that the Delivery Date for the Ship
actually will be delayed solely and directly by each such cause of delay.
1.2 The Builder shall at all times have the burden of proving each of the
matters required to be established by this clause 1 and in the event that
it is not possible for it to prove whether, or to what extent, any delay
in delivery is directly and solely attributable to a cause which is
excused by the provisions of this clause 1, the Builder shall not be
entitled to any extension of the Delivery Date.
1.3 The Builder shall be entitled to an extension of the Delivery Date, as
provided in clause 1.1, for any delay caused:
(i) by the Buyer (other than such delays, if any, as are caused by the
Buyer in the proper and timely exercise of any of its rights or
obligations under this Contract);
(ii) by legislation or other formal action by or on behalf of the German
government (or any agency or other authority of such government)
prohibiting or otherwise preventing the Builder from proceeding with
the building work;
(iii) by war or warlike events involving any country which is directly
relevant to the building of the Ship;
(iv) by extraordinary weather conditions not included in normal planning;
(v) by such strikes, lockouts and other labour disturbances of the
Builder or those of its subcontractors who supply important parts
(such as engines, major castings or major forgings) as are beyond
the Builder's control;
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FIRST ORIGINAL
(vi) by such accidents, explosions, fires, disruptions of power supplies
and other similar occurrences as are beyond the Builder's control;
(vii) by the short, late or non-delivery to the Builder of any Parts, or
the late performance of the Builder's subcontractors provided that
the late, short or non-delivery or late performance resulted from
causes which would entitle the Builder to an extension of the
Delivery Date under this clause 1 and provided that the Builder
proves that it has exercised due diligence (a) in contracting for
such Parts and with such subcontractors, (b) in the performance of
any acts required of it with respect to such Parts or
subcontractors, (c) in monitoring the acts and circumstances of
such subcontractors, and (d) in expediting deliveries or
performance under the Builder's purchase or subcontracts or
procuring equivalent substitute performance in the event of the
late delivery of such Parts or the under-performance in such
purchase or subcontracts; or
(viii) by unfavourable weather conditions if commencement of the sea
trials tests is postponed or such tests are discontinued pursuant
to clause 1.4 in Article 6 by reason of such conditions and the
number of days thereafter during which such tests cannot be
undertaken exceed three (3) in total, then any further days during
which the weather conditions remain unfavourable may be claimed
(subject to the other provisions of this clause 1) as a permissible
delay.
1.4 Notwithstanding anything to the contrary in this clause 1, the Builder
shall not be entitled to any extension of the Delivery Date for:
(i) any delay resulting from a cause of delay which has itself been
caused or contributed to by the negligence or other default of the
Builder;
(ii) any delay resulting from a cause of delay in existence as of the
Effective Date; or
(iii) any delay resulting from a cause of delay, which was or reasonably
should have been foreseen or anticipated by the Builder by reason of
facts which were, or after reasonable enquiry should have become,
known to the Builder as of the Effective Date; or
(iv) any delay resulting from a cause of delay which reasonably could
have been avoided by the Builder;
(v) any delay resulting from the late performance or default of a
subcontractor, if such delay results from a cause of delay in effect
published and announced as of the date of the award of the relevant
purchase contract or subcontract;
(vi) any delay resulting from any dispute or arbitration proceeding under
this Contract, provided that in the case of any building work under
dispute or arbitration which would otherwise be commenced prior to
the resolution thereof the Builder shall not be required to proceed
therewith (and a corresponding extension of the Delivery Date shall
be allowed) if, after written request by the Builder, the Buyer
fails to confirm forthwith its willingness to pay the amount found
due in respect of such work; or
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FIRST ORIGINAL
(vii) any delay in moving the Ship from the Shipyard to the Delivery Port
due to extraordinary weather conditions not included in normal
planning.
2. DELAY NOTICES
2.1 The Builder shall give written notice to the Buyer of a cause of delay
pursuant to clause 1.3 as soon as practicable and no later than five (5)
days after the date on which the Builder first has knowledge of such cause
of delay and in such notice the Builder shall describe the cause of the
delay, the date of commencement (or first occurrence) of the cause, its
expected duration and its expected effect on the Builder's ability to
carry on with the building work.
2.2 The Builder will provide the Buyer with regular written status reports (at
such reasonable intervals as the Buyer may request) with respect to any
delay in respect of which the Builder has given notice pursuant to clause
2.1 and as to the steps being taken (and planned) by the Builder to
minimise and overcome any actual delay in delivery of the Ship.
2.3 Within five (5) days after any cause of delay set forth in clause 1.3 has
ceased to exist, the Builder shall notify the Buyer of such cessation and
give the Buyer a written statement of the actual or estimated delay in the
completion of the building work resulting from such cause together with
such detailed documentation as is then available to it justifying such
extension, and any such detailed documentation thereafter becoming
available to the Builder shall be promptly be given to the Buyer.
2.4 On the basis of the notices, reports, statements and information given to
the Buyer by the Builder relating to any actual or estimated delay in
delivery (and such further information and documentation as the Buyer may
reasonably request), the Buyer and the Builder shall confer and attempt to
agree upon the number of days by which the Delivery Date shall be extended
provided that if the Buyer and the Builder cannot so agree within thirty
(30) days after the completion of any such conference, the extension of
the Delivery Date (if any) shall be determined as a dispute pursuant to
the provisions of Article 13.
2.5 The extension of the Delivery Date provided for in this Article shall be
the only remedy for delay to which the Builder shall be entitled and, by
way of illustration but not limitation, the Builder shall not be entitled
to damages or any adjustment in the Contract Price.
(END OF ARTICLE 5)
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FIRST ORIGINAL
ARTICLE 6: TESTS AND LIQUIDATED DAMAGES
1. TESTS
1.1 At its sole and direct risk and expense, the Builder shall subject the
Ship and specified Parts to the tests in order to ascertain whether the
Ship and such Parts have been completed in full accordance with this
Contract, the Plans and Specification.
1.2 The Buyer shall be entitled to have the Supervisor and his team present at
all tests and the Builder shall give the Supervisor:
(i) two (2) days prior written notice of all tests (except sea trials
tests) (a) designated for such notice by the Buyer after its receipt
from the Builder of an agreed schedule of tests and (b) scheduled to
take place on week-ends or other non-working days; and
(ii) twenty four (24) hours prior written notice of all other tests
(except sea trials tests).
1.3 The Builder shall give the Supervisor fifteen (15) days' estimated, and
seven (7) days' definite, prior written notice of the time and the place
for the sea trials tests provided that only one (1) day's prior written
notice need be given to the Supervisor with respect to retrials at sea
conducted within three (3) days after completion of a previous sea trial
at or upon which the need for such retrial was determined.
1.4 If the weather conditions on the date specified for the sea trials tests
are (in the reasonable opinion of the Builder) so unfavourable that they
would prevent the Builder from carrying out such tests then the same shall
take place on the first available day thereafter that weather conditions
permit. If, during the sea trials tests sudden and unexpected changes in
the weather occur which, in the reasonable opinion of the Builder, are
such as to prevent the continuation of such tests then the Builder shall
have the option of continuing such tests or of postponing them until the
next following favourable day unless the Buyer shall (in its option) agree
to accept the Ship on the basis of the tests made.
1.5 The failure of the Supervisor to be present at any test, after due notice,
shall (unless such failure is due an event or combination of events
outside the Supervisor's control) be deemed to be a waiver of the
Supervisor's right to be present at the relevant test and the Buyer shall
be obliged to accept the results of such test on the basis of acceptance
by the Builder and the Classification Society.
1.6 All tests conducted without notice to the Supervisor shall be reconducted
by the Builder on due notice to the Supervisor at the sole risk and
expense of the Builder.
1.7 If a Defect is discovered during any test the Builder shall, after
correcting such Defect, be required to make such further tests as may be
necessary in extent and number to demonstrate and confirm the complete
correction thereof provided that additional sea trials tests will not be
required if the correction of any such Defect can be verified in shop or
dock tests, and the sole and direct risk and expense of all such further
or additional tests shall be borne by the Builder.
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First Original
1.8 The term "DEFECT" means:
(i) any defect in the Ship or in any Part installed or incorporated in,
stowed on or otherwise delivered with the Ship (including Buyer's
Supplies installed by the Builder or its subcontractors) which is
due to defective materials, workmanship, construction or design or
any failure to comply with the relevant recommendations of any
subcontractors or other parties,
(ii) any inherent vice, breakdown, incompleteness, omission or other
deficiency of the Ship or any Part,
(iii) any failure of the Ship or any Part or any aspect of the building
work to comply with any of the requirements of this Contract, the
Specification or the Plans, or the requirements of any of the
subcontractors used in connection with this Contract, or
(iv) the existence of any condition, notation, qualification,
recommendation, reservation or restriction in relation to any
certificate issued by the Classification Bodies or any Regulatory
Authority,
provided that the term "Defect" shall not include any fault in any of the
Buyer's Supplies which were properly received, handled, installed or
incorporated in, stowed on or otherwise delivered with, the Ship by the
Builder in accordance with the requirements of this Contract, the
Specification and the Plans.
1.9 After all tests have been satisfactorily performed and completed, the
Builder shall:
(i) take the Ship to the sea port referred to in Article 1, clause
1.1(i)(c) and open up such machinery as (a) the Classification
Bodies and/or the Regulatory Authorities may require and/or (b) the
Buyer may reasonably require, for post-tests inspection and
examination;
(ii) correct any Defects then appearing in such machinery;and
(iii) close, connect, retry and retest the machinery, as appropriate, and
then make the Ship ready for service, and
thereafter the Buyer may require a final post-tests examination and
inspection at which the Builder shall demonstrate and confirm to the Buyer
the complete correction of any and all Defects in such machinery.
1.10 Not later than two (2) weeks before the anticipated Delivery Date, the
Builder and the Buyer shall prepare a final punch list of items which the
Buyer considers defective from the perspective of first class shipping
and/or shipbuilding practice and, subject always to Article 7 clauses 1.5
and 1.6, the Builder shall be obliged to rectify such items before
delivery.
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2. LIQUIDATED DAMAGES
2.1 The Builder agrees that certain Defects and certain delays in the delivery
of the Ship shall result in the reduction of the Contract Price by way of
the liquidated damages provided for in this clause 2.
2.2 The guaranteed trial speed ("GTS") of the Ship at a draft of [***]
[Confidential Treatment] shall be [***] [Confidential Treatment] and shall
be demonstrated by the Builder during the sea trials tests under the
conditions described in section G.2.5 of the Specification.
2.3 If the Builder fails to remedy any deficiency in the Ship's speed before
delivery, the Builder shall have no liability to the Buyer if the actual
speed of the Ship as determined during the final sea trials tests is up to
[***] [Confidential Treatment] of a knot below GTS but commencing with a
deficiency of more than [***] [Confidential Treatment] of a knot in actual
speed below the GTS the Contract Price shall be reduced by way of
liquidated damages as follows:
(i) for [***] [Confidential Treatment], a total sum of [***]
[Confidential Treatment];
(ii) for [***] [Confidential Treatment], a total sum of [***]
[Confidential Treatment];
(iii) for [***] [Confidential Treatment], a total sum of [***]
[Confidential Treatment];
(iv) for [***] [Confidential Treatment], a total sum of [***]
[Confidential Treatment];
(v) for [***] [Confidential Treatment], a total sum of [***]
[Confidential Treatment];
(vi) for [***] [Confidential Treatment], a total sum of [***]
[Confidential Treatment];
(vii) for [***] [Confidential Treatment], a total sum of [***]
[Confidential Treatment];
(viii) for [***] [Confidential Treatment], a total sum of [***]
[Confidential Treatment];
with fractions of a knot being calculated in proportion provided that if
the Defect in the actual speed of the Ship is more than [***]
[Confidential Treatment] below the GTS, then (subject to the following
proviso to this clause 2.3) the Buyer may, at its option, accept the Ship
at a reduction in the Contract Price for such Defect of [***]
[Confidential Treatment] or reject the Ship and terminate this Contract
pursuant to clause 2 in Article 9.
2.4 The guaranteed fuel consumption ("GFC") of each of the diesel engines of
the Ship at [***] [Confidential Treatment] without attached pumps shall be
[***] [Confidential Treatment]
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First Original
conditions and shall be demonstrated by the Builder in tests conducted at
the engine manufacturers' testbed.
2.5 If the Builder fails to remedy any deficiency in the fuel consumption of
the Ship's diesel engines before delivery, the Builder shall have no
liability to the Buyer if such fuel consumption as determined during the
final tests is more than the GFC provided such excess is not more than
[***] [Confidential Treatment] over the GFC but commencing with an excess
of more than [***] [Confidential Treatment] in actual fuel consumption the
Contract Price shall be reduced by way of liquidated damages by the sum of
[***] [Confidential Treatment] for each [***] [Confidential Treatment]
increase in fuel consumption above such [***] [Confidential Treatment]
level up to a maximum of [***] [Confidential Treatment] over the GFC with
fractions of every [***] [Confidential Treatment] being calculated in
proportion provided that if the fuel consumption is more than [***]
[Confidential Treatment] above the GFC, the Buyer may, at its option,
accept the Ship at a reduction in the Contract Price for such Defect of
[***] [Confidential Treatment] or reject the relevant engine(s) (without
prejudice to its other rights with respect to the Ship).
2.6 The guaranteed deadweight capacity of the Ship shall be [***]
[Confidential Treatment] under the conditions defined in sections G.2.3
and G.2.4 of the Specification and shall be demonstrated by the Builder in
the specified deadweight capacity test.
2.7 If the Builder fails to remedy any deficiency in the Ship's deadweight
capacity before delivery, the Builder shall have no liability to the Buyer
if the actual deadweight capacity of the Ship as determined in accordance
with the Specification is less than [***] [Confidential Treatment] below
the guaranteed deadweight capacity but the Contract Price for the Ship
shall be reduced by way of liquidated damages by the sum of [***]
[Confidential Treatment] of such deficiency being more than [***]
[Confidential Treatment] up to a maximum deficiency of [***] [Confidential
Treatment] at a draft of not more than [***] [Confidential Treatment] even
keel with fractions of each metric ton being calculated in proportion
provided that if the actual deadweight deficiency at a draft of not more
than [***] [Confidential Treatment] even keel is more than [***]
[Confidential Treatment] the Buyer may, at its option, accept the Ship at
a reduction in the Contract Price of [***] [Confidential Treatment] for
such Defect or reject the Ship and terminate this Contract pursuant to
clause 2 in Article 9.
2.8 The guaranteed cabin capacity of the Ship shall be as defined in sections
G.2.2.1 and G.2.2.2 of the Specification and no change shall be made to
such cabin capacity without the Buyer's prior written consent.
2.9 If the number of completed and fully habitable cabins of any of the
passenger and crew grades referred to in clause 2.1(iii) and (iv) of
Article 1 is lower than the number of cabins specified for any such grade,
the Buyer may, at its option, accept the Ship subject to a to be agreed
reduction in the Contract Price for the Ship or reject the Ship and
terminate this Contract pursuant to clause 2 in Article 9.
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FIRST ORIGINAL
2.10 In the cabins and in the public rooms and spaces of the Ship, the
guaranteed maximum vibration levels ("GVL") shall be the single peak
values defined in section G.5.2.3. of the Specification.
2.11 If, in any cabin or in any area of the public rooms and spaces of the
Ship, the measured vibration levels ("MVL"), measured as provided for in
section G.5.2.3 of the Specification, exceeds the GVL, the Builder shall
make the necessary changes before delivery to reduce such levels to the
GVL figures.
2.12 If, after the changes made by the Builder pursuant to clause 2.11, the
final MVL measured as provided for in the Specification exceeds the GVL,
the Builder shall have no liability to the Buyer for an excess of up to
[***] [Confidential Treatment] but commencing with an excess of more than
[***] [Confidential Treatment] over GVL, the Contract Price shall be
reduced by way of liquidated damages by [***] [Confidential Treatment] for
each cabin and/or for each area of public rooms or spaces of [***]
[Confidential Treatment] provided that if in more than [***] [Confidential
Treatment] of the cabins and/or if in more than [***] [Confidential
Treatment] of the aggregate area of public rooms or spaces the final MVL
exceeds the GVL by more than [***] [Confidential Treatment], the Buyer
may, at its option, accept the Ship at a reduction in the Contract Price
of:
(i) [***] [Confidential Treatment], in respect of the cabins; and/or
(ii) [***] [Confidential Treatment], in respect of the public rooms or
spaces,
or the Buyer may reject the Ship and terminate this Contract pursuant to
clause 2 in Article 9.
2.13 In the cabins and in the public rooms and spaces of the Ship, the
guaranteed maximum sound levels ("GSL") shall be the upper limits of the
sound levels defined in section G.5.2.2. of the Specification.
2.14 If, in any cabin or in any area of the public rooms and spaces of the
Ship, the measured sound levels ("MSL"), measured as provided for in
section G.5.2.2 of the Specification, exceeds the GSL, the Builder shall
make the necessary changes before delivery to reduce such levels to the
GSL figures.
2.15 If, after the changes made by the Builder pursuant to clause 2.14, the
final MSL measured as provided for in the Specification exceeds the GSL,
the Builder shall have no liability to the Buyer for an excess of up to
[***] [Confidential Treatment] but commencing with an excess of more than
[***] [Confidential Treatment] over GSL, the Contract Price shall be
reduced by way of liquidated damages as follows:
(i) from [***] [Confidential Treatment] above GSL, a total sum of [***]
[Confidential Treatment] for each cabin and/or for each area of
public rooms or spaces of [***] [Confidential Treatment]; and
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First Original
(ii) from [***] [Confidential Treatment] up to [***] [Confidential
Treatment] above GSL, a total sum of [***] [Confidential Treatment]
for each cabin and/or for each area of public rooms or spaces of
[***] [Confidential Treatment],
with fractions of a decibel calculated in proportion provided that if in
more than [***] [Confidential Treatment] of the cabins the final MSL
exceeds the GSL by more than [***] [Confidential Treatment] and/or if the
average value of MSL in more than [***] [Confidential Treatment] of the
aggregate area of public rooms and spaces exceeds the GSL by more than
[***] [Confidential Treatment], the Buyer may, at its option, accept the
Ship at a reduction in the Contract Price of:
(i) [***] [Confidential Treatment], in respect of the cabins; and/or
(ii) [***] [Confidential Treatment], in respect of the public rooms and
spaces,
or the Buyer may reject the Ship and terminate this Contract pursuant to
clause 2 in Article 9.
2.16 All reductions in the Contract Price provided for under any of clauses
2.3, 2.5, 2.7, 2.9, 2.12 and/or 2.15 shall be determined on delivery of
the Ship and made by means of set-off and deduction from the payments to
be made by the Buyer on delivery of the Ship.
2.17 The Buyer intends to arrange for the Ship's maiden cruise with fare paying
passengers to be held on the Ship's relocation voyage from the port of
delivery referred to in Article 1, clause 1.1(i)(c) above. The Builder:
(i) acknowledges that it is imperative for the Ship to be ready at the
time, and in the condition, provided for in this Contract so as to
enable the Buyer to fulfil its commitments in relation to the Ship's
maiden cruise; and
(ii) agrees to do all it can to assist the Buyer to fulfil its
commitments in relation to the Ship's maiden cruise.
2.18 If delivery of the Ship is not made on the Compensation Date, the Buyer
will suffer loss and damage (including reputational damage) in amounts
which are extremely difficult to quantify in advance but it is agreed that
the per day sums set out in paragraphs (i) to (iv) below represent a
genuine and reasonable pre-estimate of the Buyer's loss and damage for
each day of delay in delivery of the Ship beyond the Compensation Date. If
delivery of the Vessel is delayed beyond the Compensation Date, the
Contract Price shall be reduced by the way of liquidated damages for each
calendar day (or pro-rata for each part of a calendar day) by the per day
sums set out at paragraphs (i) to (iv) below from (and including) the
Compensation Date until delivery of the Ship is actually made or this
Contract is terminated:-
(i) if the Builder shall have given to the Buyer less than thirty one
(31) days notice of the delay in delivery prior to the Delivery
Date: for the first [***] [Confidential Treatment] the rate of
reduction shall be [***] [Confidential Treatment] per day; for the
next [***] [Confidential Treatment] the rate of reduction shall be
[***] [Confidential Treatment]
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FIRST ORIGINAL
[***] [Confidential Treatment] per day; and thereafter the rate of
reduction shall be [***] [Confidential Treatment] per day;
(ii) if the Builder shall have given to the Buyer more than thirty (30)
days but less than ninety one (91) days notice of the delay in
delivery prior to the Delivery Date: for the first [***]
[Confidential Treatment] days the rate of reduction shall be [***]
[Confidential Treatment] per day; for the next [***] [Confidential
Treatment] days the rate of reduction shall be [***] [Confidential
Treatment] per day; and thereafter the rate of reduction shall be
[***] [Confidential Treatment] per day;
(iii) if the Builder shall have given to the Buyer more than ninety (90)
days but less than one hundred and eighty three (183) days notice of
the delay in delivery prior to the Delivery Date: for the first
[***] [Confidential Treatment] days the rate of reduction shall be
[***] [Confidential Treatment] per day; for the next [***]
[Confidential Treatment] days the rate of reduction shall be [***]
[Confidential Treatment] per day, and thereafter the rate of
reduction shall be [***] [Confidential Treatment] per day; and
(iv) if the Builder shall have given to the Buyer more than one hundred
and eighty two (182) days notice of the delay in delivery prior to
the Delivery Date: for the first [***] [Confidential Treatment] days
the rate of reduction shall be [***] [Confidential Treatment] per
day; for the next [***] [Confidential Treatment] days the rate of
reduction shall be [***] [Confidential Treatment] per day; and
thereafter the rate of reduction shall be [***] [Confidential
Treatment] per day.
If the delay in delivery of the Ship continues for [***] [Confidential
Treatment] days after the Compensation Date then, in such event, the Buyer
may at any time thereafter terminate this Contract pursuant to Clause 2 in
Article 9. If the delay in delivery of the Ship continues for [***]
[Confidential Treatment] days after the Compensation Date, and provided
the Buyer has not by then elected to terminate this Contract, the Builder
may (by written notice) require the Buyer to make an election in which
case the Buyer shall - within 15 (fifteen) days after its receipt of the
Builder's notice - notify the Builder in writing of its intention either
to terminate this Contract or to consent to the acceptance of the Ship at
an agreed future date on the basis that the Buyer shall remain entitled to
all liquidated damages which would otherwise have been payable or
allowable by the Builder; it being further understood that, if the Ship is
not delivered by such agreed future date, the Buyer shall have the same
right of termination upon the same terms and conditions as set out above.
If the Buyer fails to make an election as specified above within the
relevant 15 (fifteen) day period, the Buyer shall be deemed to have
consented to the Ship being delivered at the future date proposed by the
Builder.
2.19 All reductions in the Contract Price provided for in clause 2.18 shall be
made in the form of payments by the Builder to the Buyer as follows:
(i) the Builder's first payment shall be made on the earlier of (a) the
thirtieth (30th) day after delivery of the Ship has been delayed
beyond the Compensation Date and (b) the date on which actual
delivery of the Ship is made; and
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FIRST ORIGINAL
(ii) thereafter the payments shall be made every ten (10) days commencing
on the tenth (10th) day after the end of the thirty (30) day period
mentioned in clause 2.19(i)(a),
and continuing on the last day of each succeeding ten (10) day period
thereafter until the day on which delivery of the Ship is actually made or
this Contract is terminated at which time the Builder shall pay the entire
remaining amount due under clauses 2.18 and 2.19.
2.20 The parties acknowledge and agree that:
(i) the Contract Price reductions and payments provided for in this
clause 2 are cumulative; and
(ii) subject always to the guarantee provisions in Article 7 clause 2 and
to the termination provisions in Article 9 clause 2, the Contract
Price reductions and payments provided for in this clause 2 shall be
the only compensation recoverable by the Buyer in respect of the
Defects and the delay in delivery to which they relate and, in
particular, the Builder shall not be liable for any consequential
losses resulting from such Defects or such delay in delivery.
(END OF ARTICLE 6)
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First Original
ARTICLE 7: DELIVERY AND GUARANTEE
1. DELIVERY AND ACCEPTANCE
1.1 The date on which the Ship shall be ready for delivery is 14 April 2006
(the "Delivery Date"). The Ship shall not be delivered before this date
without the express written approval of the Buyer. When:
(i) the Builder has completed the building work in conformity with this
Contract, the Plans and the Specification;
(ii) all tests have been performed and completed in a manner satisfactory
to the Buyer;
(iii) the Ship has been freed from all Defects (apart from Defects which
qualify as minor and insignificant Defects, as defined in clause
1.6, and Defects for which there will be a reduction in the Contract
Price in accordance with Article 6 clause 2); and
(iv) the Ship (a) has been cleaned and prepared (in accordance with the
Builder's usual practices and to their usual standards for ships of
this type) to take on a full complement of passengers, officers,
crew and staff, and (b) is in all other respects ready to commence
operations as a luxury cruise ship,
the Builder shall tender the Ship for delivery to the Buyer safely afloat
alongside a safe and accessible quay at the Delivery Port where there must
be sufficient water for the Ship always to remain afloat and from where
there must be direct, free, unimpeded, safe and lawful access to
international waters provided that (a) the Builder shall have given to the
Buyer not less than 180 (one hundred and eighty) days and ninety (90) days
estimated, followed by 15 (fifteen) days definite, prior written notice of
delivery, and (b) with effect from service of the 90 (ninety) day
estimated notice referred to above, the Builder shall have allowed
designated employees of the Star Cruises Group to attend the Shipyard and
to be present during tests and for familiarisation purposes.
1.2 The Builder shall deliver the Ship to the Buyer free and clear of all
encumbrances whatsoever.
1.3 On delivery of the Ship the Builder shall also deliver the following
documents (together, the "Delivery Documents"):
(i) a protocol of delivery and acceptance in a mutually agreed form
confirming delivery of the Ship to, and acceptance and taking
possession of the Ship by, the Buyer pursuant to this Contract,
executed in duplicate by the Builder and stating the date and
(local) time of such delivery and acceptance;
(ii) a declaration of warranty by the Builder in a mutually agreed form
confirming that the Ship is delivered to the Buyer free and clear of
all encumbrances whatsoever (including, without limitation, all
liabilities of the Builder to its subcontractors and all liabilities
arising from the operation of the Ship for the purposes of the
tests) and that the Ship is absolutely free of all burdens in the
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FIRST ORIGINAL
nature of taxes imposed by the nation, city, county, state or port
of delivery, executed in triplicate and notarised and legalised in
accordance with the Buyer's instructions;
(iii) a detailed inventory showing the machinery and equipment installed
on the Ship and the spares, stores and other consumable items
delivered with the Ship;
(iv) the makers' certificates, subcontractors' instruction books, and
all of the Classification Society, trading and other certificates
(each free of conditions, qualifications, recommendations,
reservations and restrictions) required to be supplied upon
delivery of the Ship pursuant to this Contract and the
Specification;
(v) a protocol showing the results of the tests;
(vi) such documents signed by the Builder as the Buyer may reasonably
require to procure the deletion of the Ship from the Registry of
Ships under Construction;
(vii) a commercial invoice for the Ship and all other amounts payable by
the Buyer on delivery;
(viii) a builder's certificate and a xxxx of sale, each in a form
acceptable to the Buyer, each executed in quadruplicate and
notarised and legalised in accordance with the Buyer's
instructions, and such other written instruments (each notarised
and legalised in accordance with the Buyer's instructions) as may
be necessary or desirable, in the reasonable opinion of the Buyer,
to confirm that full and clean title in the Ship has been vested in
the Buyer;
(ix) a full set of the specified construction documents (each in three
(3) white prints, one of each of which will be on board the Ship at
delivery);
(x) one CD-ROM of the principal delivery drawings and plans relating to
the Ship approved by the Classification Society; and
(xi) such further certificates and/or other documents as may be
necessary or desirable, in the reasonable opinion of the Buyer, in
connection with the Buyer's ownership, registration and/or
financing of the Ship.
1.4 If, at the time when the Builder tenders delivery of the Ship to the
Buyer, the Ship is complete (meaning that she has been designed,
engineered, built, launched, equipped, outfitted, finished and tested in
accordance with this Contract and the Specification), and if such tender
is accompanied by a tender of delivery of a complete and proper set of the
Delivery Documents, the Ship and the Delivery Documents shall thereupon be
accepted by the Buyer but if, at such time, the Ship and/or the Delivery
Documents are not complete, the Buyer shall be entitled to refuse
acceptance of the same by delivering to the Builder, within two (2)
working days from (and including) the date of such tender, a written
notice describing those aspects of the Ship and/or the Delivery Documents
which are not complete.
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First Original
1.5 Notwithstanding any provision to the contrary in this clause 1, if the
Ship is complete but for minor and insignificant Defects, the Buyer shall
accept delivery subject to:
(i) an agreed reduction in the Contract Price; or
(ii) in the Buyer's option, the Builder undertaking to correct (at the
Builder's entire risk and expense, and with all convenient speed)
minor and insignificant Defects described in a list to be prepared
by the Buyer and agreed with the Builder at or before delivery.
1.6 The expression "minor and insignificant Defects" means those Defects
which:
(i) do not and will not adversely affect the seaworthiness of the Ship;
or
(ii) do not and will not prevent the unrestricted use of the Ship in its
intended service and purpose; or
(iii) do not and will not (a) prevent the use of any of the Ship's cabins
and public areas, or (b) in any other way adversely affect the
comfort and safety of the Ship's passengers; or
(iv) do not and will not adversely affect the operational efficiency of
the Ship; or
(v) do not and will not involve any condition, qualification,
recommendation, reservation or restriction in relation to any
certificate issued (or to be issued) by the Classification Bodies or
any Regulatory Authority or any other specified person which in the
opinion of the Buyer (acting in good faith) is or could be material
in a commercial or technical sense.
1.7 Acceptance of the Ship by the Buyer shall be accomplished by:
(i) the delivery to the Builder of a counterpart of the protocol of
delivery and acceptance duly executed by the Buyer; and
(ii) payment by the Buyer to the Builder of that part of the Contract
Price which the Buyer is required to pay upon delivery of the Ship
pursuant to clause 2.1(vi) in Article 8.
1.8 The Buyer may (but shall not be obliged to) identify in the list described
in clause 1.5(ii) any Defects which are known by the Buyer to exist in the
Ship at the time that the Ship is accepted, and all such Defects (whether
or not identified or otherwise noted), shall thereafter be deemed to be,
and shall be treated as, Defects arising and reported during the Guarantee
Period.
1.9 The Buyer shall be afforded five (5) days free of any wharfage or any
other charge, and up to three (3) further days at the usual wharfage fee
charged by the relevant port authority, within which to remove the Ship
from her point of delivery.
1.10 Lubricating oil left in storage tanks, and diesel and fuel oil remaining
on board, at delivery of the Ship shall be inventoried by the Builder and
the Buyer shall pay for them
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First Original
at the Builder's actual cost price provided that the Builder shall remove
all waste-oil and sludge from the Ship at the Builder's risk and expense
prior to delivery.
1.11 In every instance in which a right or obligation or the computation of any
period of time under this Contract is in any manner or to any extent
dependent upon delivery of the Ship, delivery shall not be deemed to have
occurred unless and until the Ship and the related Delivery Documents have
been accepted by the Buyer under this clause 1.
1.12 Acceptance of the Ship and the related Delivery Documents by the Buyer
under this clause 1:
(i) shall signify that the Buyer has taken possession and the risk of
loss of the Ship and the related Delivery Documents as of the time
and date set out in the protocol of delivery and acceptance and that
the Builder may terminate the Insurances; and
(ii) shall not be deemed to constitute a waiver of or otherwise prejudice
any of the Buyer's rights under clause 2 with respect to any Defect,
whether known or unknown, and whether or not noted in any document
delivered in connection with delivery and acceptance of the Ship,
which may exist in the Ship at the time it is accepted by the Buyer,
and any such Defect may be reported to, and shall be corrected at
the sole and direct risk and expense of, the Builder as provided in
clause 2.
2. GUARANTEE
2.1 Subject to the provisions of this clause 2, the Builder guarantees:
(i) the Ship's main engines and certain components of the azipod system
(namely: the pod, the converter, trafo and main switchboard parts)
against all Defects for the period of seven hundred and thirty (730)
days; and
(ii) the Ship and all other Parts against all Defects for the period of
three hundred and sixty five (365) days,
(subject to any extension thereof as provided for in this clause 2) from
date of the Ship's actual delivery to the Buyer under Article 6 (the
"Guarantee Period").
2.2 In calculating the length of the Guarantee Period there shall be excluded
any day(s) during which the Ship is prevented from entering or is taken
out of service solely on account of any Defect in the Ship or in any Part
for which the Builder is responsible under this clause 2.
2.3 Where any Defect in the Ship or any Part (including the main engines or
azipod system as defined in subclause 2.1(i) above) is corrected during or
after the Guarantee Period, the Builder's guarantee under this clause 2
shall apply to such correction for the longer of three hundred and sixty
five (365) days from the date on which the correction was completed and
the end of the relevant period specified in subclause 2.1(i) and 2.1(ii)
above so that the Guarantee Period for the items referred to in subclause
2.1(i) shall not
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FIRST ORIGINAL
exceed one thousand and ninety five (1095) days and the Guaranteed Period
for the items referred to in subclause 2.1(ii) shall not exceed seven
hundred and thirty (730) days.
2.4 If any corrective works made or agreed to be made during or after the
Guarantee Period (or any extension thereof under clause 2.3) indicate any
recurring Defect, the Builder shall:
(i) investigate the same on the basis of a potential design Defect; and
(ii) ascertain the source of such recurring Defect and notify the Buyer
thereof; and
(iii) correct such recurring Defect, and the source thereof, in order to
avoid a continuation or repetition of such recurring Defect.
2.5 The Builder shall not be responsible for the correction of any Defect if
it is due to:
(i) perils of the sea, accident (but excluding any accident caused by
any Defect), negligence (but excluding negligence on the part of the
Builder), or improper maintenance or handling (including, without
limitation, overloading) of the Ship or any Parts; or
(ii) use of fuels or lubricants not recommended by the relevant
manufacturer; or
(iii) ordinary wear and tear; or
(iv) any fault in (or caused by) any Buyer's Supplies which were properly
(a) received, (b) handled, (c) installed or incorporated in, (d)
stowed on, or (e) otherwise delivered with the Ship by the Builder
in accordance with all of the requirements of this Contract, the
Plans and the Specification.
2.6 The Buyer shall give written notice to the Builder as soon as possible and
in any event within fourteen (14) days after the discovery of any Defect
for which a claim is made under this clause 2 and, a copy of each such
notice shall also be given to the guarantee engineer, who shall
acknowledge receipt by his signature thereof. The Buyer's notice shall
give full details (so far as possible) as to the nature of the Defect and
the extent of any damage caused thereby.
2.7 Within thirty (30) days after the end of the Guarantee Period, the Buyer
(in consultation with the guarantee engineer) will draw up, and send to
the Builder, a list identifying every Defect for which a claim is to be
made under this clause 2 provided that this clause 2.7 will not preclude
the Buyer from giving notice to the Builder of, and making claims in
respect of, any Defect which is covered by the Builder's guarantee under
clause 2.3.
2.8 Each Defect will be corrected by the Builder as soon as reasonably
practicable (and shall be scheduled so as to minimise disruption to the
Ship's service and the availability of cabins, public rooms and areas, and
other passenger facilities) or, at the Buyer's option, under the
instruction or supervision of the Builder at a suitably qualified shipyard
or workshop selected by the Buyer and approved by the Builder (such
approval not to be unreasonably withheld or delayed), and in each case the
Builder shall bear and pay:
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(i) the cost of all equipment, parts and materials required to correct
the Defect (including, without limitation, the cost of delivering
the same to the selected shipyard or workshop by airfreight if the
Buyer reasonably so requires, and the cost of returning any
defective equipment, parts and materials);
(ii) the cost of all labour required to correct the Defect including,
without limitation, the expenses of independent contractors in
travelling to the Ship;
(iii) the cost of any necessary underwater inspection of the Ship by
divers; and
(iv) where the Ship is drydocked solely on account of the need to
investigate or correct any Defect in the Ship's external underwater
parts at any time before the Ship's first scheduled drydocking after
delivery, the fuel costs of taking the Ship from her berth to the
nearest available dry-dock and vice versa, the drydocking costs and
the costs of correcting any such Defect.
For the avoidance of doubt, in view of the intended area of the Ship's
operation during the Guarantee Period, the Builder will not be entitled to
require the Ship to be returned to any of the Builder's facilities for the
correction of any Defects.
2.9 Where the Buyer discovers any Defect which (in the reasonable opinion of
the Buyer) requires correction on an urgent basis, the Buyer will (acting
in good faith) give such notice to the Builder as is practicable in the
circumstances then prevailing (the intention being that the Builder shall
have a reasonable opportunity to obtain necessary remedial instructions
from the relevant sub-contractor(s) and to relay such instructions to the
Buyer) and thereafter the necessary corrective works may be carried out by
the Ship's crew or, if practicable having regard to the degree of urgency,
by the nearest suitably qualified shipyard or workshop selected by the
Buyer, and in each such case the Builder shall reimburse the Buyer for the
costs described in clause 2.8(i), (ii), (iii) and (iv) above.
2.10 With effect from the expiry of the Guarantee Period or (if later) final
completion of all corrective works to be made by the Builder under this
clause 2, the Builder will:
(i) assign to the Buyer, to the fullest extent possible and without any
charge to the Buyer, that part of every warranty or guarantee made
or given by any sub-contractor with respect to any design,
workmanship or Part which extends beyond the Guarantee Period or
which is otherwise more favourable to the Buyer than the guarantee
of the Builder under this clause 2; or
(ii) if it is not possible fully and effectively to assign the relevant
part of any such warranty or guarantee, hold and enforce the
relevant warranty and guarantee as trustee and agent for the Buyer
and promptly account to the Buyer for all monies received in or
pursuant to the holding or enforcement of any such warranty or
guarantee.
2.11 The Builder shall, at its sole risk and expense (except for the cost of
suitable accommodation and food on board the Ship which shall be supplied
free of charge by the Buyer), employ and place a suitably qualified and
experienced English-speaking guarantee engineer acceptable to the Buyer on
board the Ship throughout the Guarantee Period and thereafter until the
Builder has corrected every Defect to which this clause 2
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applies. If the Builder should so request at delivery, the Buyer will also
make one double cabin available for a second guarantee engineer and/or
fitters for up to three (3) months after delivery.
2.12 If:
(i) any Defect in the Ship's external underwater parts is discovered
during the Guarantee Period or the period of thirty (30) days
referred to in clause 2.7; or
(ii) any Defect in the Ship's external underwater parts is discovered
during the Ship's first scheduled drydocking after delivery (which
is to commence not later than thirty six (36) months after delivery
provided that if the Ship is not drydocked within twenty four (24)
months after delivery, the Buyer and the Builder will jointly make
an in-water inspection of the Ship's underwater parts within twenty
four (24) months after delivery) and either the Builder accepts that
the Defect arose during the Guarantee Period or the Builder is
unable to prove that the Defect arose after the end of the Guarantee
Period,
the Builder shall be responsible for such Defect and the correction
thereof in accordance with this clause 2 provided that the Buyer shall
bear and pay for the haul day and any drydocking costs incurred in the
ordinary course of the Ship's normal drydocking maintenance and the
Builder, in addition to the costs of all necessary corrective works, shall
bear and pay for such additional drydocking day(s) as may be required to
correct such Defect.
2.13 Without prejudice to the Builder's obligations and liabilities under the
other provisions of this clause 2, the Builder shall not be responsible
for any loss or damage caused by any Defect except:
(i) that, in addition to the other guarantee obligations specified in
this clause 2, the Builder shall be obliged to correct (or, as
provided for in the preceding paragraphs of this clause 2, pay for
the correction of) any equipment or part of the Ship that is damaged
as a direct result of any Defect covered by the Builder's guarantee
under this clause 2;
(ii) for any loss or damage directly caused by the Builder's correction
of any Defect;
(iii) for any loss or damage directly caused by the wrongful refusal or
failure of the Builder or its subcontractors to correct (or
authorise the correction) of any Defect, and
(iv) for any increase in premium or any loss of rebate incurred by the
Buyer as a result of any claims being made on the Buyer's insurance
policies for the Ship in respect of any loss or damage referred to
in this clause 2.13.
provided always that the Builder's maximum liability in respect of any
claim made against it by the Buyer under this clause 2.13 shall not exceed
the sum of [***] [Confidential Treatment] per Defect.
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2.14 The Builder further guarantees the Ship against any latent Defects which
the Buyer can demonstrate existed at the time of the Ship's delivery to
the Buyer but which were not apparent during the Guarantee Period. If the
Buyer discovers any latent Defects after the expiry of the Guarantee
Period, the Guarantee Period shall be deemed to be extended in respect of
such Defects and the Builder shall be obliged to correct (or pay for the
correction of) such Defects in accordance with the foregoing provisions of
this clause 2 provided always that:
(i) the Buyer shall give written notice to the Builder as soon as
possible (and in any event within fourteen (14) days) after the
discovery of any latent Defect for which a claim is made under this
clause 2.14, and such notice shall give full details (so far as
possible) of the nature of the latent Defect and the extent of any
damage cause thereby;
(ii) the Buyer shall have the burden of establishing that the Defect is a
latent Defect within the meaning set out above, failing which the
Builder shall have no liability in respect thereof;
(iii) the Builder shall be under no obligation in respect of any latent
Defect unless written notice thereof has been received by the
Builder by midday (Papenburg time) on the day falling [***]
[Confidential Treatment] months from the date of the Ship's actual
delivery to the Buyer; and
(iv) the provisions of this sub clause relating to latent Defects do not
apply to paintings or coatings.
2.15 Subject to the other express provisions of this Contract, the Builder
shall not be responsible for any loss of profit or other consequential
losses suffered by the Buyer.
(END OF ARTICLE 7)
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FIRST ORIGINAL
ARTICLE 8: CONTRACT PRICE AND PAYMENT TERMS
1. CONTRACT PRICE
1.1 The Contract Price for the Ship:
(i) shall be (euro)356,200,000 (three hundred and fifty six million two
hundred thousand euro);
(ii) is a fixed price and may be adjusted only in strict accordance with,
and subject to, the express provisions of this Contract; and
(iii) includes a lump sum allowance in the amount of (euro)25,000,000
(twenty five million euro) in respect of (a) Buyer's Supplies from
time to time purchased by or at the direction of the Buyer and (b)
other costs from time to time expended by or at the direction of the
Buyer in connection with construction of the Ship, which amount
shall be paid by the Builder to the Buyer immediately after receipt
of the balance of the Contract Price (see clause 2.1(vi) below).
1.2 For the avoidance of doubt, the Contract Price includes:
(i) the cost of the Ship, completed in accordance with the requirements
of this Contract;
(ii) the cost of all building work and the cost of all tests and trials
of the Ship to be performed by, or on behalf of, the Builder;
(iii) the cost of procuring the classification notation for the Ship, and
of obtaining all certificates and other documents which are required
to be delivered pursuant to this Contract; and
(iv) all other costs and expenses of the Builder as provided for herein
or otherwise incurred by the Builder unless expressly provided for
in this Contract as being for the Buyer's account.
1.3 No commission of any kind whatsoever is or will be payable (whether
directly or indirectly) by or to any person in relation to or in
connection with this Contract or any of the business transactions
described in or contemplated by this Contract.
2. PAYMENTS
2.1 Payment of the Contract Price shall be made to the Builder as follows:
(i) [***] [Confidential Treatment], on [***] [Confidential Treatment];
(ii) [***] [Confidential Treatment] on the date falling [***]
[Confidential Treatment] calendar months before delivery of the
Ship;
(iii) [***] [Confidential Treatment], on the date falling [***]
[Confidential Treatment] calendar months before delivery of the
Ship;
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FIRST ORIGINAL
(iv) [***] [Confidential Treatment], on the date falling [***]
[Confidential Treatment] calendar months before delivery of the
Ship;
(v) [***] [Confidential Treatment], on the date falling [***]
[Confidential Treatment] calendar months before delivery of the
Ship; and
(vi) the balance of the Contract Price, on delivery of the Ship and the
Delivery Documents to, and their acceptance by, the Buyer in
accordance with the provisions of this Contract.
2.2 The Builder shall by not less than fourteen (14) days advance written
notice advise the Buyer of the date upon which each of the payments
referred to sub-clauses 2.1(ii) to (vi) shall become due and payable and,
in addition, the notice given in relation to sub-clause 2.1(vi) will show
(in reasonable detail and on an open-book basis) the Builder's calculation
of the balance of the Contract Price payable on delivery of the Ship and,
in particular, the amounts of any reductions in or additions to the
Contract Price occasioned by the terms and conditions of this Contract.
2.3 The Buyer's obligations to make the payments referred to in sub-clauses
2.1(i) to (vi) shall, in the case of each such payment, be subject to and
conditional upon the Buyer's receipt of the Builder's invoice for the
relevant payment.
2.4 Subject to the terms and conditions of the Account Block Agreement, the
Builder shall not be entitled to apply or use any payment made by the
Buyer, or any amount standing to the credit of the Builder's Account, for
any purpose other than to pay for work done and deliveries made in
relation to the construction of the Ship. The Builder shall be entitled to
withdraw amounts from the Builder's Account for such purposes so long as
the Builder is not in material breach of any of its obligations under this
Contract. The Builder's Account shall immediately be blocked in favour of
the Buyer when the Buyer notifies the Builder's Bank that the Builder is
in material breach of any of its obligations under this Contract and that
the Builder has failed to remedy such material breach within 10 (ten) days
after notice from the Buyer. At quarterly intervals counting from the
Effective Date the Builder will provide the Buyer with a status report
(verified by the Builder's auditors and in a form reasonably acceptable to
the Buyer) detailing the payments made from the Builder's Account in the
preceding quarter and the credit balance of the Account on or about the
date of each report. The Buyer may raise questions and request further
information in relation to such reports (and the status or operation of
the Builder's Account) and the Builder will ensure that any such questions
and requests for information are answered promptly and in reasonable
detail in the following order - by the Builder or (as the case may be) by
the Builder's auditors or by the Builder's Bank.
2.5 The other payments from time to time due under this Contract shall be made
as follows:
(i) payment or credits for any modification(s) pursuant to Article 3
and/or any other amount(s) accruing prior to delivery (but for which
no specific date is stipulated in this Contract) shall be made
simultaneously with delivery of the Ship, and the amount(s) thereof
shall be shown in the invoice to be issued and
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FIRST ORIGINAL
delivered by the Builder in respect of the Contract Price payment
referred to in clause 2.1(vi);
(ii) any amount for which a specific payment date is stipulated in this
Contract shall be paid on such date; and
(iii) for any amount accruing after delivery in respect of a defect,
payment shall be made as follows:
(a) if the parties agree that the defect in question is a Defect,
not later than fifteen (15) days after the Builder's receipt
of an invoice for the Defect remedied pursuant to clause 2 in
Article 7; or
(b) if the parties are in dispute as to whether the defect is a
Defect on the date on which it is finally determined or
adjudged to be a Defect under Article 13, together with
interest thereof at the relevant rate calculated from the date
of the Builder's receipt of an invoice for the Defect remedied
pursuant to clause 2 in Article 7 up to and including the date
of the Buyer's receipt of the relevant amount.
2.6 Every amount from time to time due under this Contract but unpaid for
longer than seven (7) days from (and excluding) the due date shall bear
interest at the relevant rate from the due date up to and including the
date of receipt by the party to which the amount is owed.
2.7 All amounts payable to the Builder under this Contract shall be paid
direct to the Builder's Account, and the Builder and the Buyer shall
consult with each other about the mode of payment with a view to reducing
the amount of any applicable bank transfer charges.
2.8 All payments made by the Buyer to the Builder prior to the delivery of the
Ship shall be in the nature of advances to the Builder.
2.9 All fees, costs and other charges whatsoever arising in connection with
any payment made under this Contract shall be borne and paid by the paying
party provided that any fees, costs or other charges levied by the
receiving party's bank(s) (including correspondent banks, whether in
Germany or elsewhere) shall be borne and paid by that party.
2.10 The euro is the currency of account and payment for each and every sum at
any time due from either party to the other under or in connection with
this Contract.
(END OF ARTICLE 8)
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First Original
ARTICLE 9: TERMINATION
1. TERMINATION BY BUILDER
1.1 Each of the following events shall be a "Builder Termination Event" for
the purposes of this Contract:
(i) if, without due cause, the Buyer fails to pay any part of the
Contract Price under any of clauses 2.1 (i), (ii), (iii), (iv) or
(v) in Article 8 on the due date for such payment and such failure
is not remedied within fifteen (15) working days after the receipt
by the Buyer of a written notice from the Builder notifying the
Buyer of such failure and requesting remedial action; or
(ii) if, without due cause, the Buyer fails to accept delivery of (and
pay the balance of the Contract Price for) the Ship within three (3)
working days after the Ship and the related Delivery Documents have
been duly tendered for delivery by the Builder in conformity with
this Contract; or
(iii) if (a) a final order shall be made or an effective resolution shall
be passed for the winding up of the Buyer (otherwise than by a
members' voluntary winding up for the purpose of an amalgamation or
reconstruction on terms previously approved by the Builder, which
approval shall not be unreasonably withheld) or (b) a receiver shall
be appointed of the whole or any substantial part of the undertaking
of the Buyer or (c) the Buyer shall suspend the payment of its debts
or (d) the Buyer shall make an arrangement or composition with its
creditors generally or (e) the Buyer shall apply to any court for
protection from its creditors generally.
1.2 At any time after a Builder Termination Event shall have occurred and be
continuing, the Builder may, by notice to the Buyer, terminate this
Contract whereupon:
(i) title in the Ship, the Parts, and in the Buyer's Supplies owned by
the Buyer which have been installed or incorporated in the Ship
before termination, shall pass to the Builder; and
(ii) the Builder shall retain and apply (in the manner provided for in
clause 1.3) all payments previously made by the Buyer to the Builder
under this Contract.
1.3 If the Builder terminates this Contract under clause 1.2, the Builder
shall endeavour to obtain the best market price reasonably obtainable for
the Ship, the Parts and the Buyer's Supplies referred to in clause 1.2 (i)
by sale at public auction or tender or private sale, and shall apply the
proceeds of sale (after deducting the necessary expenses of sale including
the reasonable costs of completing the Ship for sale) and all amounts
retained by the Builder under clause 1.2 (ii) plus a credit for the value
of Buyer's Supplies previously delivered by the Buyer and either retained
by the Builder or its subcontractors or sold by any of them, as follows:
(i) firstly, in satisfaction of the balance due to the Builder under
this Contract being (a) where the Ship is completed in accordance
with this Contract and then sold, the unpaid parts of the Contract
Price or (b) where the Ship is sold in an
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First Original
uncompleted state, that proportion of the unpaid parts of the
Contract Price which is required to reimburse the Builder's costs of
the building work up to the cessation of such work, and (c) all
other amounts payable by the Buyer to the Builder under the
provisions of this Contract; and
(ii) secondly, in payment of the Builder's proved loss directly resulting
from the Buyer's default; and
(iii) thirdly, in payment of any remaining balance to the Buyer,
provided that if the total of such proceeds of sale, such retained amounts
and such credit shall be less than the balance due to the Builder under
paragraphs (i) and (ii) of this clause 1.3, the difference shall be paid
by the Buyer to the Builder.
2. TERMINATION BY BUYER
2.1 Each of the following events shall be a "Buyer Termination Event" for the
purposes of this Contract:
(i) if (a) at any time the construction of the Ship is suspended for a
period of more than thirty (30) days in circumstances where the
Builder would not be entitled to claim an extension of the Delivery
Date under clause 1 of Article 5 and the Buyer reasonably believes
that the Builder will not be able to recover the lost time or (b)
delivery has not been made, or it can with reasonable certainty be
anticipated that delivery will not be made, for whatever reason or
combination of reasons (excepting only one or more independent
defaults by the Buyer), by the date falling [***] [Confidential
Treatment] from [***] [Confidential Treatment];
(ii) if the Buyer becomes entitled to terminate this Contract under any
of clauses 2.3, 2.7, 2.9, 2.12, 2.15 or 2.18 in Article 6;
(iii) if the Builder commits a material breach of any of its obligations
under this Contract (including, without limitation, its obligations
with respect to the achievement of Milestones) or the Account Block
Agreement, and fails to remedy any such breach within 30 (thirty)
days after receipt of written notice from the Buyer requesting
remedial action;
(iv) if the Builder removes the Ship from the Shipyard, or if it assigns
or transfers any of its rights or obligations under this Contract,
or if it subcontracts the whole or any major part of the building
work, except as expressly permitted by this Contract;
(v) if the Account Block Agreement is or becomes wholly or partially
invalid, ineffective or unenforceable; or
(vi) if either (a) the Builder shall fail at any time to effect or
maintain the Insurances, or any insurer shall avoid or cancel the
Insurances or the Builder shall commit any breach of or make any
misrepresentation in respect of the Insurances the result of which
is to entitle the insurers to avoid the cover or otherwise to be
excused or released from any or all of its liability thereunder, or
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FIRST ORIGINAL
(b) any of the Insurances shall cease for any reason whatsoever to
be in full force and effect, unless the Insurances are re-instated
or reconstituted in a manner meeting the requirements of this
Contract within seven (7) days; or
(vii) if (a) a final order shall be made or an effective resolution shall
be passed for the winding up of the Builder (otherwise than by a
members' voluntary winding up for the purposes of amalgamation or
reconstruction on terms previously approved by the Buyer, which
approval shall not be unreasonably withheld) or (b) a receiver shall
appointed of the whole or any substantial part of the undertaking of
the Builder or (c) the Builder shall suspend the payment of its
debts or (d) the Builder shall make an arrangement or composition
with its creditors generally or (e) the Builder shall apply to any
court for protection from its creditors generally.
2.2 At any time after a Buyer Termination Event shall have occurred and be
continuing the Buyer may, by notice to the Builder, terminate this
Contract and thereafter:
(i) the Buyer may retain and/or claim from the Builder (which shall
immediately pay to the Buyer) all liquidated damages paid or payable
by the Builder to the Buyer under clauses 2.17 to 2.19 in Article 6;
and
(ii) the Buyer may also claim from the Builder (which shall immediately
refund to the Buyer) the aggregate of (a) all payments previously
made by the Buyer to the Builder under this Contract together with
interest thereon at the relevant rate calculated from the date upon
which the Builder received each such payment to the date on which
the refund is received by the Buyer, (b) the Buyer's Supply Costs,
and (c) all other amounts payable by the Builder to the Buyer under
the provisions of this Contract; and
(iii) if the Buyer's right to terminate this Contract (whether under
Articles 4 and/or 9 or otherwise) becomes exercisable as a result of
any negligence or wilful misconduct on the part of the Builder the
Buyer shall, in addition to the payments referred to in sub-clauses
2.2(i) and (ii), be entitled to the proved loss directly resulting
from the Builder's default.
2.3 If the Buyer elects to terminate this Contract under clause 2.2 but the
payments and refunds referred to in clause 2.2 are not made in full
immediately upon such cancellation, the Buyer may (at any time thereafter)
take possession of the Ship in its then state together with the Buyer's
Supplies and all plans, machinery, equipment and other Parts appropriated
or allocated to the Ship, and complete the Ship at the Shipyard or (in the
Buyer's option) at another shipyard.
2.4 If the Buyer elects to take possession of the Ship under clause 2.3 it may
remove the Ship together with the Buyer's Supplies and all equipment and
other Parts appropriated or allocated to, or ordered for the Ship or,
alternatively, it may use the Shipyard facilities, plant, machinery, tools
and all equipment and other Parts appropriated or allocated to, or ordered
for, the Ship and in either case the Builder shall release the same to the
Buyer free from all encumbrances whatsoever against payment to the Builder
of the unpaid balance of the Contract Price less the aggregate of:
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FIRST ORIGINAL
(i) the payments, refunds and other amounts referred to in clause 2.2
(i), (ii) and (iii); and
(ii) the Buyer's good faith estimate of the costs that it will incur in
(a) moving the Ship (and the Buyer's Supplies and all related
equipment and other Parts) to another shipyard and in having the
Ship completed at such other shipyard or (b) in completing the Ship
at the Shipyard.
3. TERMINATION BY EITHER PARTY
3.1 Any event entitling a party to terminate this Contract in accordance with
its express provisions shall constitute (as the case may be) either a
repudiatory breach of, or breach of condition by the Builder or Buyer
under, this Contract or an agreed terminating event the occurrence of
which will (in any such case) entitle the relevant party to terminate this
Contract and recover the amounts provided for in this Contract either as
liquidated damages or as agreed sums deductible or payable on the
occurrence of such event.
3.2 The Builder's receipt of all payments to be made by the Buyer under clause
1.3 or, as the case may be, the Buyer's receipt of all payments to be made
by the Builder under clause 2.2 and clause 2.3 shall discharge all
obligations and liabilities of each of the parties to the other under this
Contract save for any obligations and liabilities of either party arising
under the other provisions of this Contract.
(END OF ARTICLE 9)
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First Original
ARTICLE 10: BUILDER'S REPRESENTATIONS, COVENANTS AND INDEMNITIES
1. REPRESENTATIONS, WARRANTIES AND COVENANTS
1.1 The Builder acknowledges that the Buyer has entered into this Contract in
full reliance on the representations set out in clauses 1.2 and 1.3 and
the Builder warrants that the statements contained in those clauses are in
all respects true and accurate.
1.2 Each party (in either case, the "Warrantor") represents and warrants to
the other party that:
(i) all acts, conditions and things required to be done, fulfilled and
performed in order (a) to enable it lawfully to enter into, exercise
its rights under and perform and comply with the obligations
expressed to be assumed by it in this Contract and (b) to ensure
that the obligations expressed to be assumed by it in this Contract
are legal, valid and binding have been done, fulfilled and
performed; and
(ii) no legal proceedings have been started or (to the best of the
warrantor's knowledge and belief) threatened which might have a
material adverse effect on the warrantor's ability to perform its
obligations under this Contract.
1.3 The Builder further represents and warrants to the Buyer:
(i) that neither the execution of this Contract nor the exercise by the
Builder of its rights and performance of its obligations under this
Contract will result in any breach of any German or European
Community law, regulation, rule, directive or treaty; and
(ii) neither the Builder nor (to the best of the Builder's knowledge,
information or belief) any other person has (whether directly or
indirectly) offered or paid or agreed to pay or give commission of
any kind whatsoever in relation to or in connection with this
Contract or any of the business transactions described in or
contemplated by this Contract.
(iii) that it shall obtain, comply with the terms of and do all that is
necessary to maintain in full force and effect all authorisations,
approvals, licences and consents required in or by the laws,
regulations, rules, directives and treaties of Germany and the
European Community to enable it lawfully to enter into and perform
its obligations under this Contract;
2. INDEMNITIES
2.1 The Builder shall indemnify fully, hold harmless and defend the Buyer and
the other protected parties from and against all Losses which any of them
may sustain or incur in respect of any personal injuries or other harm to
or death of any person(s) or any damage to, or loss or destruction of, any
property of any person(s), and which arise out of:
(i) any acts, omissions or defaults on the part of (a) the Builder
and/or (b) any of the Builder's subcontractors and/or (c) any of the
respective officers, employees, workmen, agents or other
representatives of the Builder or its subcontractors
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FIRST ORIGINAL
provided that this indemnity shall not (aa) extend to any Losses to
the extent they are caused by the negligence or wilful misconduct of
the Buyer or any other of the protected parties or (bb) apply to any
claim arising out of injury, harm, death, damage, loss or
destruction sustained after delivery of the Ship unless any such
claim arises out of injury, harm, death, damage, loss or destruction
sustained before delivery for which the Builder is responsible; and
(ii) any representation made by the Builder in clause 1.3 proving (at any
time before or after the date hereof) to be untrue, inaccurate or
misleading in any material respect.
(END OF ARTICLE 10)
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FIRST ORIGINAL
ARTICLE 11: INTELLECTUAL PROPERTY RIGHTS
1. PATENTS, TRADE MARKS AND COPYRIGHTS
1.1 The Builder shall pay all royalties, licence fees or other similar charges
on or in connection with:
(i) the Ship;
(ii) any Parts (other than Buyer's Supplies) installed or incorporated
in, stowed on or otherwise delivered with the Ship; or
(iii) any part of the building work.
1.2 The Builder shall indemnify fully, hold harmless and defend the Buyer and
the other protected parties from and against all Losses which any of them
may suffer or incur as a result of any actual or alleged infringement of
any patents, patent rights, copyrights, trademarks, trade secrets or other
intellectual property rights of any kind or nature on or in connection
with the Ship, the Parts (other than Buyer's Supplies) or any part of the
building work or the ownership or the proper use thereof by the Buyer
provided that this indemnity shall not apply to any such infringement if
the management of the Buyer or the management of any other protected party
knew of the relevant infringement (at any time between the Effective Date
and the date of actual delivery of the Ship) but failed to notify the
Builder.
1.3 If:
(i) the Ship or any Part (other than Buyer's Supplies) by reason of any
claim for which the Builder is responsible under this clause 1 shall
be held to constitute an infringement of any patent, patent right,
copyright, trademark, trade secret or other intellectual property
right; or
(ii) the Buyer's use, possession or quiet enjoyment of the Ship or any
such Part shall be in any manner or to any extent disturbed,
interfered with, limited, restricted or restrained,
the Builder shall, at its own expense, either procure on behalf of the
Buyer the full and free right to continue using the Ship or such Part or,
if the same can be done without material adverse affect on or delay to the
Ship's schedule, replace any infringing Part with a non-infringing Part
which is satisfactory to the Buyer and/or the Classification Bodies and/or
the Regulatory Authorities.
1.4 The Buyer shall indemnify fully, hold harmless and defend the Builder from
and against all Losses which it may suffer or incur as a result of any
actual or alleged infringement of any patents, patent rights, copyrights,
trademarks, trade secrets or other intellectual property rights of any
kind or nature on or in connection with any Buyer's Supplies, plans,
designs and engineering and design data supplied by the Buyer to the
Builder under or in connection with this Contract provided that this
indemnity shall not apply to any such infringement if the management of
the Builder knew of the relevant
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infringement (at any time between the Effective Date and the date of
actual delivery of the Ship) but failed to notify the Buyer.
2. RIGHTS TO ENGINEERING AND DESIGN DATA
2.1 All plans, designs and engineering and design data supplied by the Buyer
to the Builder which are the property of the Buyer shall remain the
property of the Buyer and such plans, designs and engineering and design
data may be used by the Builder only in such manner as is permitted by
this clause 2.
2.2 All plans, designs and engineering and design data supplied by the Builder
to the Buyer which are the property of the Builder shall remain the
property of the Builder and such plans, designs and engineering and design
data may be used by the Buyer only in such manner as is permitted by this
clause 2.
2.3 Each party shall take all reasonable precautions to maintain in
confidence, and will not use or permit the use of (except as may be
necessary for the purposes of the building work), any of the designs,
plans and engineering and design data owned by the other party.
2.4 Nothing contained in this Contract shall be construed as transferring any
patent, patent right, copyright, trademark, trade secret or other
intellectual property right created or used in the performance of this
Contract, all of which are hereby expressly reserved to the true and
lawful owners thereof.
(END OF ARTICLE 11)
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FIRST ORIGINAL
ARTICLE 12: TAXES AND CONTRACT EXPENSES
1. TAXES
1.1 All taxes of any kind whatsoever and levied by whatsoever taxing authority
arising out of or in connection with the making and execution of this
Contract, the building of the Ship, the importation of any Parts (other
than Buyer's Supplies) into Germany (or the country of any subcontractor),
the classification and delivery of the Ship, the payment of the Contract
Price in Germany and the export of the Ship or any Parts from Germany (or
the country of any subcontractor) which is payable in Germany (or in the
country of any subcontractor) shall be borne and paid by the Builder and
the Builder shall indemnify fully, hold harmless and defend the Buyer and
all other protected parties from and against any Losses which any of them
may suffer or incur in relation to any such tax.
1.2 All taxes of any kind whatsoever and levied by whatsoever taxing authority
arising out of or in connection with the importation of any Buyer's
Supplies into Germany (or the country of any subcontractor) or the
importation of the Ship or any Parts into the country of the Buyer shall
be borne by the Buyer and the Buyer shall indemnify fully, hold harmless
and defend the Builder from and against any Losses which the Builder may
suffer or incur in relation to any such tax.
2. CONTRACT EXPENSES
2.1 Each party shall bear and pay all costs and expenses incurred by it in
connection with the negotiation, preparation and execution of this
Contract.
2.2 Each party shall from time to time reimburse the other on demand for all
costs and expenses (including fees of legal and other professional
advisors) reasonably incurred by such other party in connection with the
enforcement of any of the rights of that party under this Agreement.
(END OF ARTICLE 12)
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ARTICLE 13: DISPUTES
1. TECHNICAL DISPUTES
1.1 Except where a technical dispute is determined by the Classification
Bodies under clause 4.2 in Article 1 or, as appropriate, by a Regulatory
Authority under clause 4.4 in Article 1, any technical dispute giving rise
to issues purely of fact (including, without limitation, any dispute or
difference of opinion relating to questions as to the existence, degree or
extent of any alleged non-conformity of the Ship or any Part to the
Contract, the Plans, the Specification, or the Rules) shall be referred to
the Head Offices of the Classification Bodies for final decision provided
that if the Head Office of either Classification Body declines to accept
any such referral, or if either party reasonably considers that it is not
appropriate to refer the dispute in question to the Head Offices of the
Classification Society, the dispute shall be referred to a mutually
acceptable technical expert for his final decision.
1.2 The procedure applicable to the resolution of technical disputes (whether
by the Classification Bodies or by a mutually agreed technical expert)
shall be as follows:
(i) the person or body to whom the dispute is referred (the "Expert")
shall be requested to make a final decision within fourteen (14)
working days after it has accepted the appointment;
(ii) within seven (7) working days after the Expert has confirmed to both
parties that it has accepted the appointment, each party will send
to the Expert (and simultaneously to the other party), by telefax or
registered courier, its submissions and supporting evidence in
relation to the dispute;
(iii) if a party fails to submit its submissions and supporting evidence
within the time limit laid down in paragraph (ii), it shall be
deemed to have admitted the correctness of the other party's
submissions;
(iv) the Expert shall act as an expert and not as an arbitrator;
(v) the decision of the Expert shall be final and binding on both
parties; and
(vi) the parties shall bear the Expert's costs equally.
1.3 If:
(i) the Head Office of either Classification Body declines to accept a
referral pursuant to clause 1.1; or
(ii) the Head Office of one Classification Body reaches a different
decision from the Head Office of the other Classification Body; or
(iii) a party reasonably considers that it is not appropriate to refer any
such technical dispute to the Head Offices of the Classification
Bodies and the parties fail to agree upon the identity of a mutually
acceptable technical expert within five (5) days after the date of
one party's receipt of a written notice from the other party calling
upon it to concur in the appointment of an expert,
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FIRST ORIGINAL
the dispute shall be determined in accordance with clause 2.
2. ARBITRATION
2.1 Except where a dispute is determined under clause 1.1 and subject to the
Buyer's rights under clause 3.3, all disputes or differences whatsoever
which may arise at any time out of or in connection this Contract shall be
referred to arbitration in London in accordance with the Arbitration Act
1996 or any statutory modification or re-enactment thereof save to the
extent necessary to give effect to the provisions of this Contract.
2.2 The reference shall be to two arbitrators, one arbitrator being appointed
by each party. A party wishing to refer a dispute to arbitration shall
appoint its arbitrator and send notice of such appointment to the other
party requiring the other party to appoint its own arbitrator with seven
(7) running days of its receipt (or deemed receipt) of that notice and
stating that it will appoint its arbitrator as sole arbitrator unless the
other party appoints its own arbitrator and gives notice that it has done
so within the seven (7) days specified. If the other party does not
appoint its own arbitrator, and give notice that it has done so within the
seven (7) days specified, the party referring the dispute to arbitration
may, without the requirement of any further prior notice to the other
party, appoint its arbitrator as sole arbitrator and shall advise the
other party accordingly. The award of the sole arbitrator shall be binding
on both parties as if such arbitrator had been appointed by agreement of
both parties. Nothing in this Contract shall prevent the parties agreeing
to vary these provisions to provide for the appointment of a sole
arbitrator. If the two (2) arbitrators properly appointed hereunder by the
parties shall not agree, they shall appoint an umpire whose decision shall
be final.
2.3 All arbitration proceedings shall be held and conducted in London, in the
English language, under English law and in accordance with the London
Maritime Arbitrators' Association ("LMAA") Terms current at the time when
the proceedings are commenced (which Terms are deemed to be incorporated
by reference into this clause 2).
2.4 Any person appointed as an arbitrator under this Contract shall be
knowledgeable in commercial ship construction and no such person shall
have had, or shall have any expectation of acquiring, any business or
financial relationship with either of the parties to this Contract, except
such relationship as may be acquired by reason of that person being
appointed as arbitrator pursuant to this clause 2; it is not necessary for
any person appointed as an arbitrator under this Contract to be a member
of, or otherwise to be affiliated or connected with, the LMAA.
2.5 If any dispute or difference arises prior to delivery of the Ship and is
referred to arbitration in accordance with this clause 2, the parties
acknowledge that time will be of the essence in obtaining an award from
the arbitrators in relation to such dispute or difference and,
accordingly, the parties agree to establish and utilise a fast track
arbitration procedure. To this end the arbitration tribunal shall be
instructed to hear the merits of the dispute as presented by the parties
as soon as may be practicable and in any event within 200 (two hundred)
days after the commencement of proceedings. The parties agree that the
decision of the arbitration tribunal shall be final and binding on the
parties except that either party may appeal to the English High Court in
London in respect of any manifest error of law. The decision of the
tribunal shall be given in
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writing with reasons, and shall include a finding as to whether or not the
Delivery Date should, as a result or such dispute or difference, be in any
way altered thereby.
2.6 The parties will use all reasonable efforts to keep any arbitration
proceedings concerning this Contract (and any award made in such
proceedings) confidential.
2.7 Subject to clause 1.4(vi) in Article 5, no dispute or difference under or
in relation to this Contract shall entitle the Builder to cease or suspend
any part of the building work or to withhold delivery of the Ship, nor
shall any such dispute or difference entitle the Buyer to withhold the
payment of any part of the Contract Price due under any of clauses 2.1(i),
(ii), (iii), (iv) or (v) in Article 8 beyond the relevant due date for
payment provided that nothing in this provision shall prejudice any right
which:
(i) the Builder may have to retain possession of the Ship on account of
non-payment of the Contract Price; or
(ii) the Buyer may have to dispute the due date for payment of any part
of the Contract Price under clause 2.1 (vi) in Article 8.
2.8 For the avoidance of doubt, if any dispute or difference arises before
delivery of the Ship and is referred for determination under any of the
provisions of clauses 1 or 2 hereof, the Builder shall not be entitled to
dispose of the Ship pending the final determination of such dispute or
difference.
3. GOVERNING LAW
3.1 This Contract is governed by and shall be construed in accordance with
English law and, without prejudice to the provisions of clauses 1 and 2,
each party hereby irrevocably submits itself to the jurisdiction of the
English courts for the purposes of any arbitration or other proceedings
under or in connection with this Contract, and for the enforcement of any
awards rendered under or in connection with this Contract.
3.2 Service of any claims or awards issued out of, or made or granted by, the
English courts may be served by being delivered to the relevant party at
the address for such party set out in clause 4.
3.3 The Buyer reserves the right to proceed under this Contract against the
Builder in the German state courts for interlocutory relief (einstweiliger
Rechtsschutz).
4. NOTICES
4.1 Any notice or other communication made under or in connection with this
Contract shall be in writing in the English language and shall be given to
the addressee at the address set out below or sent by telefax to the
telefax number given below, marked for the attention of the relevant
individual listed in the "Attention" lines set out below provided that all
notices and communications relating to technical matters (including,
without limitation, those concerning the approval of Plans and tests)
shall be given to the Supervisor at the address set out in paragraph (ii)
below or sent by telefax to the telefax number specified in paragraph (ii)
below.
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First Original
(i) if to the Buyer, to: SHIP VENTURES INC.
c/o 0000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Telefax: + 1 305 436 4113
Attention: Xx. Xxxxx Xxxxxx, President & CEO
with a telefax copy to: + 001 305 436 4117
Attention: Mr. Xxxx Xxxxxx, General Counsel
(ii) if to the Supervisor, to: THE SUPERVISOR
c/o the Supervisor's designated office
at the Shipyard
Telefax: + 00-0000-000000
Attention: Xx. Xx Xxxxxxx
(iii)if to the Builder, to: XXX. X. XXXXX GMBH
Xxxxxxxx 0000
X00000 Xxxxxxxxx
Xxxxxxx
Telefax: + 49-4961-814300
Attention: Xx. X. Xxxxx
or to such other person, address or telefax number as either party may (by
not less than five (5) working days' notice in writing) specify to the
other.
4.2 In the absence of evidence of earlier receipt, any notice or other
communication shall be deemed to have been duly given:
(i) if correctly addressed and marked for the attention of the
appropriate individual and delivered personally, when left at the
appropriate address of the addressee;
(ii) if correctly addressed and marked for the attention of the
appropriate individual and sent by pre-paid registered mail (or
registered airmail if international) or courier, upon
acknowledgement of receipt by return telefax; and
(iii) if correctly addressed and marked for the attention of the
appropriate individual and sent by telefax to the correct number,
upon acknowledgement of receipt by return telefax.
(End of article 13)
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ARTICLE 14: GENERAL MATTERS
1. COMPUTATION OF TIME
1.1 Except as otherwise provided in this Contract, all periods of time shall
be computed by including Saturdays, Sundays and holidays except that if
any period terminates on:
(i) any day which is not a working day in London or Papenburg (in the
case of periods applicable to action by the Buyer); or
(ii) any day which is not a working day in Papenburg (in the case of
periods applicable to action by the Builder),
such period shall be deemed to be extended to the next following working
day in such place.
2. ASSIGNMENTS
2.1 The Buyer may:
(i) grant to its financiers of the Ship, or the other financiers of the
Star Cruises Group, a first assignment (or other security interest)
of this Contract and of all the Buyer's rights, title, interest and
benefits in relation to this Contract and the Insurances;
(ii) assign, novate or transfer this Contract to any member of the Star
Cruises Group or (with the prior approval of the Builder, which is
not to be unreasonably withheld) to any other person whatsoever; and
(iii) assign its rights under Article 7, Clause 2 to any purchaser, lessee
or bareboat charterer of the Ship,
provided that the guarantee provided for in Clause 13 shall remain in full
force and effect notwithstanding any such assignment, novation or
transfer.
2.2 The Buyer shall be entitled to mortgage the Ship, and to charge the
Buyer's Supplies and other items in which it has title from time to time
under this Contract, for the purposes of securing the pre and post
delivery financing arrangements for the Ship entered into at any time by
the Buyer, its assignees and any other members of the Star Cruises Group.
2.3 The Builder shall at its own cost promptly give all such assistance,
provide all such information, and execute and deliver all such documents
to the Buyer and/or any other relevant person, body or entity (including,
but not limited to, the Registry of Ships under construction and the
Bundesamt fur Seeschiffahrt und Hydrographie) as may from time to time be
request by the Buyer in connection with the registration and deletion of
the Ship in and from the Registry of Ships under Construction. In addition
to its obligations under Article 4 Clause 1, the Builder undertakes to
identify and/or xxxx the Ship for the purposes of such registration.
2.4 The Builder shall not assign or novate or transfer, or purport to assign
or novate or transfer, any of its rights or obligations under this
Contract save that the Builder may
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FIRST ORIGINAL
assign its rights hereunder to its financiers for the Builder's
pre-delivery construction financing of the Ship.
3. PARTIAL ILLEGALITY
3.1 If any provision of this Contract or the application thereof to any person
or in any circumstances shall to any extent be illegal, invalid or
unenforceable, such illegality, invalidity or unenforceability shall not
prejudice the effectiveness of the remainder of this Contract or the
application of such provision to other persons or in other circumstances
and each other provision of this Contract shall be legal, valid and
enforceable to the fullest extent permitted by law.
4. CONFIDENTIALITY
4.1 After the date of this Contract, the parties will agree the terms and
publication date(s) of press announcements in relation to the construction
of the Ship.
4.2 Save as provided in clause 4.1, the parties shall treat as confidential
and use all reasonable efforts to ensure that their respective agents,
officers, employees, workmen, subcontractors, and other representatives
treat as confidential, the provisions of this Contract provided that:
(i) each party may, with the prior written consent of the other,
disclose to any third party information relating to the matters
referred to in this clause 4.2; and
(ii) each party shall be entitled to disclose any such information to
their shareholders, bankers, auditors and/or legal advisors or to
such extent as may from time to time be required by law or the rules
or regulations of any applicable stock exchange or similar body.
5. AMENDMENTS
5.1 No amendment, modification, supplement or other variation of this
Contract, the Plans or the Specification shall be of any effect unless
made in writing and signed by the Builder and the Buyer or their
respective duly authorised representatives.
6. NO WAIVER
6.1 No failure or delay on the part of either party in exercising any right,
power or remedy under this Contract shall operate as a waiver thereof or a
waiver of any other rights, powers or remedies nor shall any single or
partial exercise of any such right power or remedy preclude any other or
further exercise of any such right, power or remedy or the exercise any
other right, power or remedy.
6.2 The respective rights, powers and remedies conferred on the parties by
this Contract are cumulative and (save where the contrary is expressly
stated) are in addition to (and not exclusive of) any rights, powers and
remedies provided by law.
7. CONSENTS
7.1 Subject to clause 1.6 in Article 2, where any matter:
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(i) requires an instruction from the Buyer, a waiver by the Buyer or the
approval, authority or consent of the Buyer any such instruction,
waiver, approval, authority or consent shall not be deemed to have
been given or to any extent effective unless it is given in writing
by a duly authorised representative of the Buyer; and
(ii) is required to be acceptable or satisfactory to the Buyer, the Buyer
shall not be deemed to have accepted, or to be satisfied with such
matter, unless its acceptance or satisfaction is communicated in
writing to the Builder by a duly authorised representative of the
Buyer.
8. LANGUAGE
8.1 The official text of this Contract (and all plans, drawings, test and work
schedules, reports, protocols, certificates, instruction booklets,
notices, communications and other materials or documents to be drawn up,
developed or supplied under this Contract) shall be in the English
language.
9. MODELS
9.1 The Builder shall build and supply free of charge to the Buyer (and place
on board the Ship at or before delivery) the models of the Ship described
in section G6.2 of the Specification.
10. COUNTERPARTS
10.1 This Contract may be executed in up to four (4) counterparts each of which
when dated and signed by (or on behalf of) both parties shall be an
original, but all counterparts together shall constitute one and the same
instrument.
11. EFFECTIVE DATE
11.1 This Contract shall not have any legal effect whatsoever until the time on
the date (the "Effective Date") when all of the following conditions have
been satisfied:
(i) each party shall have received an original counterpart of this
Contract, duly signed by the other party;
(ii) the Buyer shall have confirmed in writing to the Builder that is has
approved the form and terms of the Insurances;
(iii) each of the Account Block Agreement and the Opinion Letter shall
have been signed and delivered;
(iv) the contract for Hull S.667 shall have been signed and shall have
become effective; and
(v) the Buyer shall have confirmed by written notice to the Builder that
it has obtained binding written commitments (in terms reasonably
satisfactory to the Buyer) for the pre and post delivery loan
financings (including the "Hermes" cover) that will be required to
enable the Buyer to part fund certain of the payments referred to in
clause 2 of Article 8.
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FIRST ORIGINAL
11.2 If this Contract has not come into effect by 4pm (Papenburg time) on 26
September 2003 either party may, by written notice given to the other
within ten (10) days thereafter, cancel this Contract.
11.3 In the event of the exercise by either party of its right to cancel this
Contract under clause 11.2, this Contract shall, with effect from such
cancellation, be null and void without any liability whatsoever on the
part of either party.
11.4 Notwithstanding any provision to the contrary in this Contract, the Buyer
shall not be obliged to make any payment to the Builder hereunder until
such time as all of the conditions set out in clause 11.1 have been
fulfilled or expressly waived in writing by both parties.
12. PROTECTED PARTIES
12.1 Any of the protected parties may enforce the terms of any provision of
this Contract which purports to confer any rights on them, subject to and
in accordance with the Contracts (Rights of Third Parties) Xxx 0000.
12.2 The Builder and the Buyer may at any time, by agreement between them,
rescind this Contract or vary it without the consent of the protected
parties.
12.3 If any protected party becomes entitled to bring a claim against the
Builder under or in respect of this Contract, the Buyer shall bring such
claim against the Builder on behalf of the relevant protected party.
12.4 If any claim is made against the Builder by the Buyer on behalf of a
protected party under clause 12.3, the Builder shall only have available
to it by way of defence any matter that would have been available to it by
way of defence if the relevant protected party had been a party to this
Contract.
12.5 Save as provided above the operation of the Contracts (Rights of Third
Parties) Xxx 0000 is hereby excluded.
13. GUARANTEE
13.1 Arrasas guarantees to the Builder the due and punctual observance and
performance of all the terms, conditions and covenants on the part of the
Buyer contained in this Contract and agrees to pay to the Builder each sum
of money which the Buyer is at any time liable to pay to the Builder under
or pursuant to this Contract and which has become due but has not been
paid.
13.2 Neither the obligations of Arrasas under the guarantee provided for in
Clause 13.1 nor the rights, powers and remedies conferred upon the Builder
in respect of such guarantee shall be discharged or impaired by any act,
circumstance, event or omission which (but for this Clause 13.2) might
operate to discharge or impair any of the obligations, rights, powers or
remedies referred to above.
(END OF ARTICLE 14)
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First Original
SCHEDULE
1. DEFINITION OF CERTAIN TERMS
1.1 In this Contract:
"Account Block Agreement" means an agreement which is to be executed by
the Buyer, the Builder and the Builder's Bank in order to provide for
certain rules concerning payments into and from the Builder's Account.
"Builder's Account" means the euro account numbered 0000000 and held by
the Builder's Bank at its office in Bremen;
"Builder's Bank" means Commerzbank AG;
"building work" means all of the Parts to be provided and all of the work
to be done by the Builder under and in connection with this Contract, as
more particularly described in the Specification and the Plans, and
includes all Parts to be provided and all work to be done by the Builder's
subcontractors;
"Buyer's Supplies" has the meaning given in Article 1, clause 1.1(i)(b)
and, for the avoidance of doubt, any of the US manufactured and processed
materials referred to in Article 1, clause 3.3 which are used in the
construction of the Ship shall be regarded as "Parts" rather than "Buyer's
Supplies";
"Buyer's Supply Costs" means at any given time the aggregate of (i) the
costs incurred by the Buyer in relation to the carriage, pre-delivery
insurance and delivery of all Buyer's Supplies and (ii) the cost to the
Buyer of obtaining replacements for such Supplies at such time;
"Class Rules" has the meaning given in Article 1, clause 4.1;
"Classification Bodies" means American Bureau of Shipping and Det Norske
Veritas Classification AS;
"commission" means any benefit (whether monetary or not), brokerage,
commission, consideration, gift, gratuity, inducement, payment, reward or
success fee of any kind whatsoever payable to any broker, agent,
intermediary or other person in relation to or in connection with the
placing and/or performance of this Contract;
"Compensation Date" means (i) the 5th (fifth) day from (and including) the
Delivery Date or (ii) the 3rd (third) day from (and including) the
Delivery Date if the Ship has not been delivered by the intended delivery
date mentioned in the 15 (fifteen) days definite notice given by the
Builder under clause 1.1 in Article 7;
"Contract" means this shipbuilding contract and includes the Plans, the
Specification and the schedule, each of which forms an integral part of
this Contract;
"Contract Price" means the fixed price for the Ship specified in clause
1.1 of Article 8;
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"correct" shall be construed (in Article 8, clause 2) so as to mean and
include rectify, remedy, repair and replace with the intent that the
Builder's duty under Article 8, clause 2 shall be to take all necessary
corrective action by (as may be appropriate) correcting or rectifying or
remedying or repairing or replacing, or paying for the correction or
rectification or remedy or repair or replacement of, every Defect to which
clause 2 applies;
"Defect" has the meaning given in Article 6, clause 1.8;
"DELIVERY DATE" means the fixed delivery date for the Ship specified in
clause 1.1 of Article 7, it being acknowledged and agreed by the parties
that such date may be reset only in strict accordance with, and subject
to, the express provisions this Contract;
"Delivery Port" has the meaning given in Article 1, clause 1.1 (c);
"Dispute Notice" had the meaning given in Article 2, clause 6.1;
"Effective Date" has the meaning given in Article 14, clause 11.1;
"encumbrance" means (i) any claim (whether in personam or in rem and
including any arrest or other detention in connection with any claim) and
any debt, and/or (ii) any mortgage, charge, pledge, maritime or possessory
or other lien, assignment, hypothecation, trust arrangement, encumbrance,
or other security interest securing any obligation of any person or any
other type of preferential arrangement (including, without limitation,
title transfer and retention arrangements) having a similar effect and or
(iii) any of the German Law Encumbrance Rights, but does not include any
permitted encumbrance;
"Euribor" means the percentage rate per annum determined by the Banking
Federation of the European Union for the relevant period displayed on the
appropriate page of the Telerate or the Reuters screen from time to time
or, if such display is not available at any relevant time, as certified by
the head office of the Builder's Bank;
"Flag State" means the United States of America;
"German Law Encumbrance Rights" means any retention of title
(Eignetumsvorbehalt, auch erweitert, verlangert, weitergeleitet,
nachgeschaltet, nachtraglich, als Kontokorrentvorbehalt, als
Konzernvorbehalt u.s.w.), right of retention (Zuruckbehaltungsgrecht),
pledge, lien (Pfandrecht) and any other encumbrance (sonstige Belastung)
or other similar rights under German law;
"Insurances" has the meaning given in Article 4, clause 2.2;
"List of Suppliers" means the agreed list of approved subcontractors dated
22 August 2003 and initialled by the parties for the purposes of
identification;
"Losses" means any and all causes of action, charges (including interest
charges), costs, claims (in contract, tort or otherwise), controls,
liquidated or unliquidated damages, demands, expenses, fees (including
legal fees) fines, liabilities (civil, criminal or otherwise), losses
(other than consequential losses), payments, penalties, proceedings,
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restrictions, suits and any and all other sanctions of a monetary nature
other than taxes;
"Milestones" has the meaning given in Article 2, clause 4.1;
"Opinion Letter" means a legal opinion from Xxxxxx & Xxxxx to the Buyer
(in a form reasonably acceptable to the Buyer) regarding retention of
title and title transfer issues relating to this Contract.
"Parts" has the meaning given in Article 1, clause 1.1(i)(b);
"partial loss" means any loss of or damage to the Ship (including Buyer's
Supplies and other Parts) which does not constitute a total loss and
"partial loss proceeds" means any insurance proceeds paid and/or payable
in respect of any partial loss;
"permitted encumbrance" means any encumbrance (i) created by the Buyer or
(ii) arising by operation of law in connection with claims against the
Buyer for which the Buyer would not be entitled to compensation or
indemnification from the Builder under this Contract;
"Plans" means the GA Plan No. P.8573-A19 dated 22 August 2003 and
initialled by the parties for the purposes of identification, and the
technical system and other plans and drawings described or referred to in
the Specification;
"protected parties" means (i) every member of the Star Cruises Group from
time to time (as certified by the Buyer), and (ii) all of the respective
agents, officers, employees, workmen, suppliers and other representatives
of (a) the Buyer and (b) each other protected party;
"Regulatory Authorities" means those authorities, bodies and entities
having regulatory responsibility and authority in respect of the Ship or
specific areas or parts of the Ship, whether before or after delivery
under this Contract, including (i) the International Maritime
Organisation, (ii) the World Health Organisation, (iii) the United States'
Coast Guard and Public Health Services authorities, (iv) the maritime and
other relevant authorities of the Flag State, and (v) all other specified
national or international regulatory authorities, bodies and entities;
"Regulatory Rules" has the meaning given in Article 1, clause 4.3;
"relevant rate" means the aggregate of (i) one per cent (1%) and (ii)
EURIBOR for the relevant period;
"Ship" means the ship which is the subject of this Contract and all Parts
(including all delivered Buyer's Supplies);
"Shipyard" means the Builder's shipyard at Papenburg, Germany;
"Specification" means Specification Xx. X.0000 - Xxxx Xx. X.000 dated 22
August 2003 and the Appendices thereto marked A, B and C (the
"APPENDICES") and, unless the context otherwise requires, "SPECIFIED"
means stipulated in the Specification or in the Appendices;
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"Star Cruises Group" means (i) Star Cruises Limited and its subsidiaries
from time to time, and (ii) all other associated or affiliated companies;
"subcontractor(s)" shall include each of the Builder's makers and
suppliers, and any other person, company or other entity under contract to
the Builder or used by the Builder in connection with the design,
construction, manufacture or supply of any materials, machinery,
equipment, other parts or services for the Ship;
"tests" means (i) the shop, dock, sea and other tests, trials and
inspections described in the Specification and the Plans and (ii) such
other tests, trials and inspections (or retests, retrials and
reinspections) as the Buyer and/or the Classification Bodies and/or the
Regulatory Authorities may reasonably require in order to demonstrate and
confirm the complete correction of any Defects;
"total loss" means any actual, constructive, compromised or arranged or
agreed total loss of the Ship (including Buyer's Supplies or other Parts);
"working day" means any day, other than a Saturday or Sunday, on which
banks are generally open for business in each of London and Papenburg; and
"(EURO)" and "EURO" denote the single currency unit of the European Union.
2. INTERPRETATION OF CERTAIN REFERENCES
2.1 Save where the contrary is expressly stated, any reference in this
Contract to:
(i) this Contract, the Specification, the Appendices, the Plans or any
other agreements or documents shall be construed as a reference to
this Contract, the Specification, the Appendices, the Plans or, as
the case may be, such other agreements or documents as the same may
have been, or may from time to time be, amended, modified, varied,
novated or supplemented;
(ii) an Article or the schedule shall be construed as a reference to an
Article or the schedule of this Contract;
(iii) an award shall be construed as a reference to any award, decision,
declaration, injunction, judgement, order or other relief;
(iv) a claim shall be construed as a reference to any action, claim,
demand, proceeding, process or suit, whether in arbitration or
court or otherwise;
(v) a clause shall be construed as a reference to a clause of the
Article in which the reference appears;
(vi) a person shall be construed as a reference to any individual, firm,
company, corporation, unincorporated body of persons, or any state
or state agency,
(vii) a party to this Contract shall include a reference to such party's
successors and permitted assigns;
(viii) a tax shall be construed as a reference to any tax, levy, impost,
duty or other charge of a similar nature (including, without
limitation, any penalty or interest
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FIRST ORIGINAL
payable in connection with any failure to pay or any delay in
paying any of the same);
(ix) a receiver shall be construed so as to include any liquidator,
trustee, administrator, receiver, administrative receiver or
similar officer; and
(x) the winding up of a party to this Contract shall be construed so as
to include any equivalent or analogous proceedings under the law of
the jurisdiction in which such party is incorporated or any other
jurisdiction in which such party carries on business.
2.2 The Index, Article, clause and schedule headings and sub-headings are
inserted for convenience only and shall not affect the interpretation of
this Contract.
3. PRIORITY OF CONTRACT, PLANS AND SPECIFICATION
3.1 This Contract, the Plans, the Specification and the Appendices are
intended to compliment and supplement one another. All general language or
requirements embodied in the Specification are intended to amplify,
explain and implement the requirements of this Contract. The Specification
and the Plans are also intended to explain each other, and anything shown
in the Plans but not stipulated in the Specification or stipulated in the
Specification and not shown in the Plans shall be deemed and considered as
if embodied in both. The Appendices are intended to clarify, amplify and
supplement the Specification.
3.2 If any conflict is found to exist between:
(i) the provisions of this Contract, on the one hand, and the
Specification and/or the Plans on the other hand, then to the extent
of such conflict only, the Specification and the Plans shall be
ineffectual, and the provisions of this Contract shall prevail, and
in all other respects the Specification and the Plans shall be and
remain in full force and effect provided that to the extent such
conflict arises solely because this Contract, on the one hand, and
the Specification and/or the Plans, on the other hand, contain
requirements that are in addition to the requirements of the other,
then all of such additional requirements shall be fully complied
with by the Builder; or
(ii) the provisions of the Specification, on the one hand, and the Plans,
on the other hand, then to the extent of such conflict only, the
Plans shall be ineffectual, and the provisions of the Specification
shall prevail, and in all other respects the Plans shall be and
remain in full force and effect provided that to the extent such
conflict arises solely because the Specification, on the one hand,
and the Plans, on the other hand, contain requirements that are in
addition to the requirements of the other, then all of such
additional requirements shall be fully complied with by the Builder;
or
(iii) the provisions of the Appendices, on the one hand, and the
Specification and/or Plans on the other hand, then to the extent of
such conflict only, the Specification and the Plans shall be
ineffectual, and the relevant provisions of the Appendices shall
prevail, and in all other respects the Specification and the
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First Original
Plans shall be and remain in full force and effect provided that to
the extent such conflict arises solely because the Appendices, on
the one hand, and the Specification and/or Plans on the other hand
contain requirements that are in addition to the requirements of the
other, then all of such additional requirements shall be fully
complied with by the Builder; or
(iv) a Plan, on the one hand, and another Plan on the other hand, then to
the extent of such conflict only, the Plan with the earlier date
shall be ineffectual, and the other Plan shall prevail, and in all
other respects the Plans shall be and remain in full force and
effect provided that to the extent such conflict arises solely
because a Plan, on the one hand, and another Plan on the other hand,
contain requirements that are in addition to the requirements of the
other, then all of such additional requirements shall be fully
complied with by the Builder.
SIGNATURES
SIGNED by MR. C XXXXXX
for and on behalf of
SHIP VENTURES INC.
SIGNED by TAN SRI XX XXX
for and on behalf of
ARRASAS LIMITED
SIGNED by MR. B XXXXX
for and on behalf of
XXX. X. XXXXX GMBH
(END OF CONTRACT)
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FIRST ORIGINAL
ADDENDUM XX. 0
XXXXXXXX XX. 0 TO THE SHIPBUILDING CONTRACT DATED AS OF 15 SEPTEMBER 2003 (AS
AMENDED, THE "CONTRACT") AND MADE BETWEEN XXX. X. XXXXX GMBH AS BUILDER
("BUILDER"), SHIP VENTURES INC. AS BUYER ("BUYER") AND ARRASAS LIMITED AS
BUYER'S GUARANTOR IN RELATION TO HULL NO. S.668 ("SHIP").
1. The parties have agreed that in Article 1, Clause 2.1(vi) of the Contract,
the paragraph entitled "Diesel Engines" has been amended to read "5 x MAN
B&W 12V 48/60 B each capable of a maximum continuous rating of 14,400kW at
514 rpm (or equivalent)".
2. In consideration for the Builder's agreement to the amendment specified at
paragraph 1 above, the Buyer has agreed that the Contract Price stated in
Article 8, Clause 1.1(i) of the Contract has been increased to (euro)
359,850,000 inclusive of the lump sum allowance specified in Article 8,
Clause 1.1(iii) of the Contract.
3. Save and except as expressly provided in this Addendum No. 1, the terms
and conditions of the Contract shall remain unamended and in full force
and effect.
SIGNATURES
Signed by XXXXXXX XXXXX
for and on behalf of
XXX. X. XXXXX GMBH
as of 13 April 2004
Signed by XXXX XXXXXX
for and on behalf of
SHIP VENTURES INC.
as of 7 April 2004
Signed by XXXX XXXXXX
for and on behalf of
ARRASAS LIMITED
as of 7 April 2004
