EXHIBIT 10(g)
SHIPBUILDING CONTRACT
BETWEEN
XXX. X. XXXXX GMBH
AND
ARRASAS LIMITED
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IN RELATION TO HULL NO. S.667
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First Original
CONTENTS
CLAUSE PAGE
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Article 1: Subject matter of Contract............................................................. 1
1. Agreement to build, sell and purchase..................................................... 1
2. Description of the Ship................................................................... 1
3. Specification and Plans................................................................... 3
4. Classification............................................................................ 4
5. Builder's right to subcontract............................................................ 5
6. Buyer's Supplies.......................................................................... 7
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) 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 (the "BUYER").
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 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.
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:
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First Original
(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 seawater 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 5 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.667 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 Society 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 various shipbuilding materials, which were
manufactured and processed in the United States of America, 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, the Classification Society,
and the maker's standards, for items furnished by the Builder.
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First Original
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 Det Norske Veritas (the "Classification Society"), in
accordance with the regulations, requirements, resolutions and rules of
the Classification Society (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 + 1A1 Passenger Vessel,
ECO, CLEAN free of all conditions, notations, qualifications,
recommendations, reservations and restrictions.
4.2 The Classification Society's 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 Society and other third parties
in relation to the building work shall be for the account of the
Builder.
4.6 Although the Classification Society 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 Society 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
Society 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
Society 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
Society 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 Society 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 Society 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 Society 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
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FIRST ORIGINAL
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.
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.
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FIRST ORIGINAL
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 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
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First Original
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 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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FIRST ORIGINAL
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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FIRST ORIGINAL
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 Society 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, following its receipt of a notice under clause 2.1, 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).
2.3 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 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 Society 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.667 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.667.
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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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 $25,000,000 (twenty five million dollars) 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 Society
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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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 Society 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
Society 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] with a [***] [Confidential
Treatment] 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
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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 [***] [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] metric tons 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.
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.
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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
(ii) 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],
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:
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(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]
days the rate of reduction shall be [***] [Confidential
Treatment] per day; for the next [***] [Confidential
Treatment] the rate of reduction shall be [***] [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] the rate of reduction shall be
[***] [Confidential Treatment] per day; for the next [***]
[Confidential Treatment] the rate of reduction shall be [***]
[Confidential Treatment] per day; and thereafter the rate of
reduction shall be [***] [Confidential Treatment] per day;
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(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 [***] [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] 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] the rate of reduction shall be [***]
[Confidential Treatment] per day; for the next [***]
[Confidential Treatment] 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
(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:
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(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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ARTICLE 7: DELIVERY AND GUARANTEE
1. DELIVERY AND ACCEPTANCE
1.1 The date on which the Ship shall be ready for delivery is 5 August 2005
(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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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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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
Society 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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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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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] 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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ARTICLE 8: CONTRACT PRICE AND PAYMENT TERMS
1. CONTRACT PRICE
1.1 The Contract Price for the Ship:
(i) shall be $390,000,000 (three hundred and ninety million
dollars);
(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 $25,000,000
(twenty five million dollars) 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], within [***] [Confidential
Treatment] working days after the Effective Date;
(ii) [***] [Confidential Treatment], within [***] [Confidential
Treatment] working days after the Effective Date;
(iii) [***] [Confidential Treatment] on the date falling [***]
[Confidential Treatment] calendar months before delivery of
the Ship;
(iv) [***] [Confidential Treatment] on the date falling [***]
[Confidential Treatment] calendar months before delivery of
the Ship;
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(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 delivered by the Builder in respect of the Contract
Price payment referred to in clause 2.1(vi);
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(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 dollar 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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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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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]
days 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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(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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(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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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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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 Society 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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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
Society 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 Office of the Classification
Society for its final decision provided that if the Head Office of the
Classification Society 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 Office 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 Society 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 the Classification Society declines to
accept a referral pursuant to clause 1.1; or
(ii) a party reasonably considers that it is not appropriate to
refer any such technical dispute to the Head Office of the
Classification Society 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,
the dispute shall be determined in accordance with clause 2.
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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 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.
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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.
(i) if to the Buyer, to: Arrasas Limited
c/o Star Cruise Sdn Bhd
Wisma Genting 22 Floor
28 Jalan Sultan Ismail
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00000 Xxxxx Xxxxxx
Xxxxxxxx
Telefax: + 000 000 0000
Attention: Xx Xxxxxx Xxx
with a copy to: Xxxxxxxx Chance
000 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Telefax: x00 00 000 0000
Attention: Mr Xxxx Xxxxxx
(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 requested 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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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.668 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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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 If, pursuant to clause 2.1, Arrasas assigns, novates or transfers this
Contract to a substitute buyer, Arrasas guarantees to the Builder the
due and punctual performance of all the terms, conditions and covenants
to be performed by such substituted buyer and agree to pay to the
Builder each sum of many which such substituted buyer is at any time
liable to pay to the Builder under or pursuant to this Contract and
which has become due and payable 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 confirmed on 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 or remedies referred to above.
(END OF ARTICLE 14)
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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 dollar 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 Society" has the meaning given in Article 1, clause
4.1;
"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;
"Flag State" means the Bahamas;
"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;
"Libor" means the percentage rate per annum for dollar deposits for the
relevant period as displayed on the appropriate page of the Telerate or
Reuters screen from time to time or, if such display is not available
at any relevant time, as certified by the main London office of the
Builder's Bank;
"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, restrictions, suits and any and all other
sanctions of a monetary nature other than taxes;
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"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-A18 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 authorities of the Flag State, and (v) all other specified
national or international regulatory authorities;
"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)
LIBOR 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 No. P.8573-Hull No.S.667 dated 22
August 2003 and the Appendices marked A, B and C thereto (the
"Appendices") and, unless the context otherwise requires, "Specified"
means stipulated in the Specification or in the Appendices;
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First Original
"Star Cruises Group" means (i) Star Cruises Limited and its
subsidiaries 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 Society 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
"$" And "Dollar" denote the lawful currency of the United States of
America.
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 Tan Sri Xx Xxx
for and on behalf of
ARRASAS LIMITED
SIGNED by Xx X. Xxxxx
for and on behalf of
XXX. X. XXXXX GMBH
(End of Contract)
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ADDENDUM NO.1
Addendum No.1 to the shipbuilding contract (as amended and supplemented from
time to time, the "CONTRACT") dated as of 15 September 2003 and made between
Xxx. X. Xxxxx GmbH as builder (the "BUILDER") and Arrasas Limited as buyer
("AL") of Hull No.S.667 (the "SHIP").
WHEREAS:
(A) AL wishes to assign and transfer the Contract (and all of its rights
and obligations under and in connection with the Contract and all
related documents including but not limited to the Plans and
Specification) to Hull 667 Limited ("HL") as buyer of the Ship.
(B) HL is willing to take the assignment and transfer referred to in
recital (A), and the Builder is prepared to consent to their assignment
and transfer, on and subject to the terms and conditions of this
Addendum.
IT IS HEREBY AGREED AS FOLLOWS:
1. Subject always to the proviso to clause 2.1 in Article 14 of the
Contract, AL, HL and the Builder agree that with effect from 1600 hours
(Papenburg Time) on 25 March 2004:
(i) HL shall be substituted in place of AL as the buyer of the
Ship under the Contract; and
(ii) Each reference in the Contract to "Buyer" shall be construed
as being a reference to HL as buyer of the Ship.
2. For the benefit of the Builder, it is acknowledged and agreed by AL and
HL that AL shall remain fully responsible for the performance and
observance of all transferred obligations.
3. Each of the Builder and AL hereby agree that they will execute, sign
and do any and every such further assurance, document, act or thing as
in the reasonable opinion of HL may be necessary to perfect the
assignment and transfer arrangements described in and contemplated by
this Addendum.
4. Save and except as expressly provided in this Addendum, the terms and
conditions of the Contract shall remain unamended and in full force and
effect.
5. This Addendum shall be deemed an integral part of, and read as one
with, the Contract.
6. Expressions defined in the Contract shall bear the same meanings when
used in this Addendum.
7. This Addendum will be treated as having been signed at the time and on
the date when each of the parties have dated and signed a counterpart
of this Addendum and exchanged the same by fax with the other parties.
Thereafter, and for record purposes only, three (3) original
counterparts of this Addendum shall be dated and signed by the Builder,
AL and HL.
Signed by: XXXX-XXXXX XXXXXX
for and on behalf of
the BUILDER on 25 March 2004
Signed by: XXXX XXXXXX
for and on behalf of
AL on 24 March 2004
Signed by: XXXX XXXXXX
for and on behalf of
HL on 24 March 2004
(End of Addendum No.1)
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