STANDARD FORM SHIPBUILDING CONTRACT 2000 BETWEEN SOLSTRAND AS ( AS“BUILDER”) AND TRICO SHIPPING AS (AS“BUYER”) FOR ONE MT6009 MK II PLATFORM SUPPLY VESSEL BUILDER'S HULL NO: 83
EXHIBIT
1.1
STANDARD
FORM
BETWEEN
SOLSTRAND
AS
(
AS“BUILDER”)
AND
TRICO
SHIPPING AS
(AS“BUYER”)
FOR
ONE
MT6009 XX XX PLATFORM SUPPLY VESSEL
BUILDER'S
HULL NO:
83
Norwegian
Shipowners Association Norwegian
Shipbuilders Sales &
Marketing
Organization
Norwegian
Shipbuilders
Association
PREAMBLE
|
ARTICLE
I
|
DEFINITIONS
|
|
ARTICLE
II
|
THE
VESSEL, DESCRIPTION AND CLASS
|
|
ARTICLE
III
|
PRICE
AND PAYMENT TERMS
|
|
ARTICLE
IV
|
ADJUSTMENT
OF CONTRACT PRICE - CANCELLATION BY THE BUYER
|
|
ARTICLE
V
|
APPROVAL
OF PLANS AND DRAWINGS AND INSPECTION DURING CONSTRUCTION
|
|
ARTICLE
VI
|
MODIFICATIONS
AND CHANGES
|
|
ARTICLE
VII
|
TEST
AND TRIALS
|
|
ARTICLE
VIII
|
DELIVERY
DATE AND DELIVERY
|
|
ARTICLE
IX
|
DELAYS
AND EXTENSION OF TIME FOR DELIVERY (FORCE MAJEURE)
|
|
ARTICLE
X
|
WARRANTY
OF QUALITY
|
|
ARTICLE
XI
|
OWNERSHIP,
RISK AND INSURANCE
|
|
ARTICLE
XII
|
DEFAULT
PROVISIONS
|
|
ARTICLE
XIII
|
ASSIGNMENT
|
|
ARTICLE
XIV
|
TAXES
AND DUTIES
|
|
ARTICLE
XV
|
PATENTS,
TRADEMARKS, COPYRIGHTS
|
|
ARTICLE
XVI
|
BUYER'S
SUPPLIES
|
|
ARTICLE
XVII
|
NOTICES
|
|
ARTICLE
XVIII
|
ENTIRE
CONTRACT
|
|
ARTICLE
XIX
|
GOVERNING
LAW, DISPUTE AND ARBITRATION
|
PREAMBLE
THIS
CONTRACT is made this 13th day of March, 2006 by and between:
Solstrand
AS........................................................................................................................,
a
company
organised and existing under the laws of Norway, having its principal office
at
0000 Xxxxxxxxxx, Xxxxxx, (hereinafter called the "Builder") and
Trico
Shipping AS, a company organised and existing under the laws of
Norway
having
its principal office at Xxxxxxxxxxx. 0, XXX 000, 0000 Xxxxxxxx (hereinafter
called the "Buyer"),
WHEREBY
In
consideration of the mutual covenants herein contained, the Builder agrees
to
design, build, launch, equip, complete, sell and deliver to the Buyer at the
Builder´s shipyard the "Vessel" as hereinafter described; and the Buyer agrees
to purchase the "Vessel", take delivery and pay for it;
all
in
accordance with the terms hereinafter set forth.
ARTICLE
I DEFINITIONS
In
this
CONTRACT the following words shall have the meaning set out
hereinbelow:
"Banking
Days" days
where banks are open for business in:
Norway
and
the
country where the BUYER has its principal office and
the
country where the bank set out in Article III clause 3 is situated and
the
country of the currency set out in Article III clause 2
"Builder" the
company referred to as "Builder" in the preamble, inclusive of its servants
and
employees
"Buyer" the
company referred to as "Buyer" in the preamble, inclusive of its servants and
employees
"Buyer´s
Supplies" any
item,
equipment, stores or services ordered directly by the Buyer from the
manufacturer or supplier, which shall not be supplied and/or paid for by the
Builder in accordance with the terms of the Contract
"Classification
Society"
or"Class" the
Classification Society referred to in Article II clause 3
"Contract" this
Standard Form Shipbuilding Contract with its Appendices and Exhibits including
Specifications and Drawings, and any amendments thereto
"Contract
Delivery
Date" the
date
set out in Article VIII clause 1
"Contract
Price" the
Original Contract Price, as adjusted in accordance with the terms of the
Contract
"Date
of Contract" the
date
specified in the preamble to this Contract, regardless of whether the contract
actually is signed on this date or whether the contract is signed with
subject
"Delivery
and
Acceptance" the
physical delivery of the Vessel from the Builder to the Buyer
"Delivery
Date" Contract
Delivery Date, as adjusted for Permissible Delay
"Drawings" the
plans
and drawings listed in Appendix I hereto
"Flag
State" the
State
referred to in Article II clause 5
"Force
Majeure" any
one
or more of the
events set out in Article IX clause 1
"Force
Majeure
Delay" a
delay
caused by Force Majeure, which according to Article IX constitutes Permissible
Delay
"Guarantee
Period" a
period
of 12 months from the Delivery and Acceptance of the Vessel, or such other
period as may be mutually agreed between the Buyer and the Builder
"Maker´s
List" an
agreed
list of suppliers approved for delivery of equipment, machinery or services
which shall be included in the Specifications
"Original
Contract
Price" the
price
stipulated in Article III clause 1
"Permissible
Delay" all
delays, inclusive of Force Majeure Delay, causing delay in delivery of the
Vessel which according to the terms of the Contract permit postponement of
the
Delivery Date
"Regulatory
Bodies" the
relevant authorities imposing rules and regulations with which the construction
and delivery of the Vessel must comply, which shall include the authorities
of
the Flag State together with other authorities set out in the
Specifications
"Representative" a
person
or persons authorised by the Buyer as set forth in Article V clause
2
"Specifications" the
specifications referred to in Appendix I hereto
"Subcontractor" any
person (not being a servant or employee of the Builder) or company, with whom
the Builder has entered into a contract for the design, construction,
manufacture or supply of any item, equipment, work or service for the
Vessel
"Vessel" the
vessel described in Article II.
"Working
Day" a
day
when work is normally performed in the country of the Builder's yard as referred
to in Article II clause 1
ARTICLE
II THE
VESSEL, DESCRIPTION AND CLASS
1. Description
and Standard
The
Vessel shall be built at the Builder's yard at Tomrefjord, Norwayand shall
have
the Builder's Hull No 83, and be designed, constructed, equipped, completed
and
delivered by the Builder in accordance with the provisions of the
Contract.
In
the
event of inconsistency between this Standard Form Shipbuilding Contract and
the
Specifications and/or the Drawings, this Standard Form Shipbuilding Contract
shall prevail. In the event of inconsistency between the Specifications and
the
Drawings, the Specifications shall prevail. In case of inconsistency between
any
of the Drawings, the later in date shall prevail.
The
Vessel shall be designed and built in accordance with first class shipbuilding
practice in Western Europe for new vessels of similar type and characteristics
as the Vessel.
2. Main
Dimensions and Characteristics
Dimensions:
Overall
length: 74,87
m
Length
between P.P.:
67,20
m
Breadth
moulded: 16,40
m
Depth
moulded to main deck midship: 7,45
m
Cargo
capacity:
The
Vessel's deadweight shall be 3250 tons (of 1000 kg each) on international summer
freeboard, corresponding to a mean draft in saltwater (specific gravity 1.025)
of 6,225 m . The specified deadweight shall include fuel, provisions, stores,
freshwater, crew and passengers in addition to spare parts in excess of the
requirements of Class.
Cubic
capacity: See
Specification
The
Vessel's cubic capacity shall be ................... cubic meter/cbft, and
as
otherwise set out in the Specification.
Propulsion
machinery:
Type:
Max.
continuous power 2 x 1500 kW at 1200 revs./min. or 2x1600 kW at 1000 rpm in
the
choice of the Builder.
Speed:
The
Vessel's average speed on a sea trial undertaken in both directions over a
measured distance, with clean hull, in calm weather, wind and sea not exceeding
Beaufort 3 and 2 respectively and with draft 4,5 m shall be at least 14,5 knots
at 2x1500 (1600) kW , corresponding to 100 % of max. continuous power at approx.
(2x1500) at1200 revolutions per minute or (2x1600) at 1000 revolutions per
minute.
Fuel
consumption:
The
further details of the above main particulars, as well as definitions and
methods of measurements and calculation shall be as described in the
Specification.
3. Classification,
Rules and Regulations
The
Vessel, including its machinery, equipment and outfittings shall be designed
and
constructed in accordance with the rules and regulations of Det norske Veritas
(the Classification Society), with the following Class notation: +1A1 - SF
-EO-,
dk(+) hl(2,5), DynPos, AUTR, LFL*, CLEAN, COMF-V (3). Bridge arrangement to
comply with recommendations: Naut OSV.The Vessel shall further comply with
the
applicable rules, regulations and requirements of the Regulatory Bodies. All
such rules, regulations and requirements shall be complied with without
conditions/recommendations.
All
fees
and charges incidental to and in respect of compliance with Class and the rules,
regulation and requirements of the Class or Regulatory Bodies referred to above
shall be for the account of the Builder.
4. Subcontracting
The
hull
and major sections thereof are accepted by the Buyer to be subcontracted in
a
low cost country. The Builder shall remain fully liable for the due performance
of such work as if done by the Builder at the Builder's yard.
Except
as
otherwise stipulated in the Specifications and the "Maker's List" or agreed
in
writing, the Builder may, without interference from the Buyer, freely choose
its
Subcontractors, but the Builder shall in ample time notify the Buyer in writing
before placing major orders for equipment or services with Subcontractors,
and
shall give reasonable consideration to Buyer's request. Any opinions or requests
made by the Buyer entail no alteration of the Builder's obligation and liability
under the Contract.
5. Certificates
and Registration
The
Builder shall provide, deliver and pay for all certificates necessary for the
approval of the Vessel, as further set out in the Contract, together with all
documents reasonably required by the Buyer necessary for the registration of
the
Vessel in Norway.(Flag State). The Vessel shall be registered by the Buyer
at
its own cost and expense.
ARTICLE
III PRICE
AND PAYMENT TERMS
1. Original
Contract Price
The
Original Contract Price is NOK
166.900.000.-
NorwegianKroneronehundredandsixtysixmillionninehundredthousand
00/100
2. Currency
All
payments by the Buyer to the Builder under the Contract shall be made in
NOK
3. Terms
and Method of Payment
The
Original Contract Price shall be paid in instalments as follows:
(a) 1st
Instalment:
The
sum
of NOK 33.380.000 - 20%
shall
be
paid five (5) Banking Days after the Contract is declared effective and a
satisfactory repayment bank guarantee is received from the Builder’s
bank..
(b) Instalment
on Delivery and Acceptance:
The
sum
of NOK 133.520.000,- plus
any
increase or minus any decrease due to adjustments of the Contract Price
hereunder, shall, subject to the other provisions of the Contract, be paid
upon
Delivery and Acceptance of the Vessel.
All
instalments shall be remitted to the Builder’s Bank as per written
instructions.
Notice
of
the instalment payable on Delivery and Acceptance shall include notice of
adjustments, if any.
The
Buyer
shall provide to the Builder a confirmation acceptable to the Builder and the
Builder’s bank, to satisfy that the Buyer has financial arrangements or
resources to pay the instalments when due.
The
Buyer's obligation to pay the first and subsequent instalments, excluding the
instalment payable on Delivery and Acceptance, shall be subject to the Builder
providing the Buyer with refund guarantee(s) from a bank or other security,
satisfactory to the Buyer, securing the repayment obligation of the Builder
if
the contract is lawfully cancelled.
The
Builder may retain the Vessel until full payment has been made in accordance
with the agreed payment terms. If the Builder is unable to present a final
account at delivery, the Buyer may require the Vessel to be delivered in return
for a bank guarantee or other security, satisfactory to the Builder, for the
reasonably estimated balance owed to the Builder. Costs of such guarantee to
be
for Builder's account.
In
the
event of any dispute concerning the payment on delivery of the Vessel, including
the question of the Buyer's right to offset any claim it may have, the Buyer
may
by paying the entire amount demanded by the Builder require the Builder to
provide a bank guarantee or other security satisfactory to the Buyer for the
disputed amount. The Builder cannot in such case refuse to deliver the Vessel.
If the Builder does not wish to issue security for the disputed part of the
claim, the Buyer is entitled to take delivery of the Vessel against payment
of
the undisputed amount and provide a bank guarantee or other security
satisfactory to the Builder for the disputed part of the claim. Security which
has been issued by a party pursuant to this sub-clause terminates automatically
unless the other party has brought legal action pursuant to Article XIX below
within 3 months from date of issue of the security. The costs of security shall
be shared proportionately between the parties according to the final outcome
of
the dispute.
If
on or
before Delivery and Acceptance of the Vessel the Builder is declared bankrupt,
proposes or enters into a fund or a formal composition arrangement or moratorium
or otherwise proves to be in such financial position that it is likely to be
unable during the Guarantee Period to perform its guarantee obligations, the
Buyer may demand that the Builder shall provide satisfactory security for the
performance by the Builder of such guarantee obligations, limited to 1% % of
the
Original Contract Price, or failing such guarantee, the Buyer is entitled to
deposit the equivalent amount in an escrow account in the joint name of the
Builder and the Buyer and to deduct this amount from the instalment to be paid
on Delivery and Acceptance.
Failure
by the Buyer to pay on time any part of the Contract Price shall entitle the
Builder to charge interest at the rate of 3 months Nibor plus 1,5% (per cent)
per annum thereon.
ARTICLE
IV ADJUSTMENT
OF CONTRACT PRICE - CANCELLATION BY THE BUYER
The
Contract Price shall be subject to adjustments, as hereinafter set forth, in
any
of the events set out in this Article IV (it being understood by both parties
that any reduction of Contract Price is by way of liquidated damages and not
by
way of penalty) and the Builder shall not in any way be responsible or liable
for any other consequences by way of damages or otherwise as a consequence
of
any of the matters hereinafter set forth in this Article IV, except for the
Buyer's right to cancel in accordance with the provisions of the
Contract.
1. Late
Delivery
(a) If
the
delivery of the Vessel is delayed beyond the Delivery Date, the Contract Price
shall be reduced by deducting therefrom as follows:
1st
-
15th day No
reduction
16th
-
45th day NOK
20.000 per day
46th
-
180th day NOK
25.000 per day
The
maximum reduction in the Contract Price for delayed delivery shall not exceed
the total of the above liquidated damages for 180 days of delay.
(b) If
the
Vessel is delivered earlier than the contracted Delivery Date, the Buyer shall
pay to the Builder a bonus
by
adding to the Contract Price NOK 20.000,- per day for all days the Vessel is
delivered earlier than the contracted Delivery Date.
(c) If
the
delay in delivery of the Vessel shall continue for a period in excess of 180
days after Delivery Date, the Buyer may at its option cancel the
Contract.
Provided
the Buyer has not sent notice of cancellation as provided for in Article XII
hereof within 185 days of delay having elapsed after the Delivery Date, the
Builder may demand in writing that the Buyer shall make an election either
to
cancel the Contract, or to consent to the acceptance of the delivery at a
specific future date reasonably estimated by the Builder to be the date when
the
Vessel will be ready for delivery; in which case the Buyer shall, within 15
days
after such demand is received by Buyer, notify the Builder of its choice it
being understood that, if the Buyer elects not to cancel and the Vessel is
not
delivered by such future date, the Buyer shall have the right to cancel the
Contract.
(d) If
the
total accumulated delay of non Permissible Delay and of Force Majeure Delay,
but
excluding other Permissible Delay, amounts to 270 days or more, then in such
event the Buyer may cancel the Contract. The Builder may, at any time
thereafter, demand in writing that the Buyer shall make an election either
to
cancel the Contract or to consent to the acceptance of the delivery at a
specific future date reasonably estimated by the Builder to be the date when
the
Vessel will be ready for delivery, in which case the Buyer shall, within 15
days
after such demand is received by Buyer, notify the Builder of its choice; it
being understood that, if the Buyer elects not to cancel and the Vessel is
not
delivered by such future date, the Buyer shall have the right to cancel the
Contract.
(e) If
it can
be established beyond any reasonable doubt that the Vessel will be delayed
for
more than 180 days as per paragraph (b) above, or be delayed for more than
270
days as per paragraph (c) above, the Buyer shall have a right forthwith to
cancel the Contract.
2. Speed
deficiency
If
the
speed as stipulated in Article II clause 2 (as adjusted pursuant to Article
II
clause 3 and/or Article VI as
the
case may be) is not achieved, the Contract Price shall be reduced as
follows:
(a) For
each
full tenth (1/10) knots reduction up to 1/1 knots no reduction shall be made.
(b) For
each
full tenth (1/10) knots reduction in the speed thereafter NOK
20.000,-.
The
total
reduction pursuant to this Article IV, clause 2 shall be limited to max.
NOK
200.000,-.
(c) If
the
deficiency in speed is more than 2,5 knots, the Buyer may cancel the
Contract.
3. Deficiency
in Fuel Consumption - No
penalty
4. Deficiency
in Deadweight
If
the
deadweight (3250 tons) stipulated in Article II, is not attained and the
reduction exceeds 8 % of the stipulated deadweight, the Contract Price shall
be
reduced by NOK 50.000 for each 10 tons of the reduction in excess of the said
8
%, but always limited to a maximum of 16%
If
the
reduction in deadweight is more than 16 % of the stipulated deadweight Buyer
may
cancel the Contract.
5. Deficiency
in Cubic capacity
*
*
*
If
the
Contract is cancelled pursuant to this Article IV, the instalments paid by
the
Buyer shall be repaid forthwith in accordance with Article XII clause
1.
Insofar
as items 1 to 5 inclusive above are not filled in, the provisions of Article
X
of the Contract shall apply.
If
Article II clause 2 includes figures with the qualification "about", such
qualification shall be disregarded for the purposes of calculation of liquidated
damages and the right of cancellation pursuant to this Article IV.
ARTICLE
V APPROVAL
OF PLANS AND DRAWINGS AND INSPECTION DURING CONSTRUCTION
1. Approval
of Plans and Drawings
As
soon
as possible after the Date of Contract the Builder shall put forward a proposed
detailed building schedule, including a schedule for testing. The Buyer shall
make its comment on the schedule as soon as possible and at the latest within
7
days. The schedules shall be issued by the Builder in writing not later than
30
days after the Date of Contract.
(a) In
accordance with the construction schedule of the Vessel and provisions in the
Specifications, the Builder shall submit electronically to the Buyer the plans
and drawings for its approval at the address set forth in Article XVII hereof.
The Builder shall send a notice by telefax (or by such other electronic means
as
the parties may agree) to the Buyer giving the date of despatch of such plans
and drawings, and the Buyer shall confirm receipt of such plans and drawings.
The Buyer shall within 14 Working Days after receipt thereof, send to the
Builder 1 copy of such plans and/or drawings with Buyer's approval or comments
(if any) written thereon. Such comments shall be as complete as possible.
(b) If
Buyer's comments on the plans and drawings are unclear or unspecified, the
Builder may by fax notice to the Buyer request a clarification, and failure
by
the Buyer or its Representative to respond to this request within 3 Working
Days
of receipt of such notice shall entitle the Builder to place its own reasonable
interpretation on such remarks, comments or amendments when implementing the
same.
(c) If
the
Builder and the Buyer fail to agree whether such comments or remarks are of
such
a nature or extent as to constitute modification or change under Article VI
hereof, the Builder shall nevertheless proceed with the construction based
on
the Buyer's comments if so requested by the Buyer. If it is established by
mutual agreement or by arbitration as per Article XIX, that the comments,
remarks or amendments constitute a modification or change under Article VI,
the
Builder shall be entitled to an appropriate adjustment of the Contract Price,
Delivery Date and/or the characteristics of the Vessel. Article VI clause 1,
first paragraph to apply.
(d) In
the
event that the Buyer fails to return the plans and drawings to the Builder
within the time limit specified in (a) above, the Builder shall by fax to the
Buyer request the return of same within 3 days, failing which the Builder shall
have the right to consider such plans and drawings as approved by the
Buyer.
(e) The
Buyer's approval or non approval of drawings shall not affect any of the
Builder's obligations hereunder, including the Builder's obligation to deliver
the Vessel fully approved by the Regulatory Bodies, or the Builder's
responsibility under Article X hereof.
2. Appointment
of Buyer's Representative
The
Buyer
may send to and maintain at the Builder's yard, at the Buyer's own cost and
expense, one or more representatives, of whom only one shall be duly authorised
in writing by the Buyer (herein called the "Representative") to act on behalf
of
the Buyer in attending the tests and inspections relating to the Vessel, its
machinery, equipment and outfitting, and in any other matters for which he
is
specifically authorised by the Buyer. Unless otherwise advised by the Buyer
in
writing, the Representative shall have no general authority to change the
Contract or to approve plans and drawings. The Representative shall, however,
be
authorised to sign Change Order Forms (Article VI clause 1) on behalf of Buyer,
unless otherwise advised by Buyer in writing. The Representative shall have
as
many assistants as he may require, but any and all approvals must be given
by
the Representative and be in writing.
3. Inspection
by Representative
The
inspection of the Vessel, its machinery, equipment and outfittings shall be
carried out by the Classification Society, Regulatory Bodies and the
Representative and/or his assistants throughout the entire period of
construction, in order to ensure that the Vessel is duly constructed in
accordance with the Contract.
Whilst
the Vessel is under construction and until Delivery and Acceptance, the
Representative and his assistants shall during all working hours be given free
access to the Vessel, its engines and accessories, and to any other place where
work is being done, or materials are being processed or stored in connection
with the construction of the Vessel, including the yards, workshops and offices
of the Builder, and the premises of the Subcontractors of the Builder who are
doing work or storing materials in connection with the Vessel's
construction.
The
Representative and his assistants shall, during the construction of the Vessel,
have the right to attend all tests, trials and inspections undertaken in respect
of the Vessel, its machinery, equipment and outfittings. The Builder shall
give
reasonably notice in advance of any such tests and inspections to the
Representative to enable him or any of his assistants to attend. Failure of
the
Representative or his assistant(s) to be present at such tests and inspections
after due notice to him as above provided shall be deemed to be a waiver of
his
right to be present.
The
Builder shall seek to arrange with its Subcontractors that the Representative
or
his assistants have a similar right of inspection and supervision in respect
of
the work performed by the Subcontractors.
In
the
event that the Representative discovers any design, construction or material
or
workmanship which in his opinion does not conform to the requirements of the
Contract, the Representative shall as soon as possible advise the Builder of
such non-conformity. Unless the Builder agrees to rectify the matter, a notice
thereof (which may be included in minutes of meeting or similar) shall be given
to the Builder.
Inspection
as described in this clause shall not constitute any changes in the Builder's
obligation under the Contract.
4. Facilities
The
Builder shall furnish the Representative and his assistant(s) with adequate
office space, and such other reasonable facilities according to the Builder's
practice at, or in the immediate vicinity of, the shipyard as may be necessary
to enable them to effectively carry out their duties. Such facilities incl.
flat(s) shall be for 2 persons.
5. Representative
- Division of Liability
The
Representative and his assistant(s) shall at all times be deemed to be the
employees of the Buyer and not of the Builder. The Builder shall be under no
liability whatsoever to the Buyer, the Representative or his assistant(s),
and
the Buyer shall keep the Builder harmless, for personal injuries, including
death, suffered during the time when the Representative or his assistant(s)
are
on the Vessel, or within the premises of either the Builder or its
Subcontractors or are otherwise engaged in or about the construction of the
Vessel, unless, however, such personal injuries, including death, were caused
by
gross negligence of the Builder, or any of its employees or agents or
Subcontractors. Nor shall the Builder be under any liability whatsoever to
the
Buyer, the Representative or his assistant(s) for damage to, or loss or
destruction of property of the Representative or his assistant(s) unless such
damage, loss or destruction is caused by gross negligence of the Builder, or
any
of its employees or agents or Subcontractors.
The
Buyer, the Representative and his assistant(s) shall be under no liability
whatsoever to the Builder, the Builder's employees or Subcontractors, and the
Builder shall keep the Buyer, the Representative or his assistant(s) harmless,
for personal injuries, including death, unless such personal injuries including
death were caused by gross negligence of the Representative or his assistant(s).
Nor shall the Buyer be under any liability whatsoever to the Builder, the
Builder's employees or Subcontractors for damage to, or loss or destruction
of
property of the Builder, its employees or Subcontractors unless such damage,
loss or destruction were caused by gross negligence of the Representative or
his
assistant(s).
6. Responsibility
of Buyer
The
Buyer
shall undertake and assure that the Representative and his assistant(s) shall
carry out their duties hereunder in accordance with normal shipbuilding practice
and in such a way as to avoid any unnecessary increase in building cost, delay
in the construction of the Vessel, and/or any disturbance to the construction
schedule of the Builder.
The
Builder has the right to request the Buyer to replace the Representative or
any
of his assistant(s) who is deemed by the Builder to be unsuitable and
unsatisfactory for the proper progress of the Vessel's construction. The Buyer
shall investigate the situation by sending its representative(s) to the Shipyard
if necessary, and if the Buyer considers that such Builder's request is
justified, the Buyer shall effect such replacement as soon as
convenient.
ARTICLE
VI MODIFICATIONS
AND CHANGES
1. Modification
of Specifications
The
work
to be performed by the Builder under the Contract can be modified or changed
by
request from the Buyer provided that such modifications or changes will not
adversely affect the Builder's other commitments, and provided further that
the
parties shall first agree to possible adjustment in Contract Price, the Delivery
Date and such other terms and conditions occasioned by or resulting from such
modification or change. Such agreement shall be effected either by way of
exchanges of letters duly signed by authorised representatives of the parties,
or by signed change order form, or by minutes of meeting or similar signed
by
authorised representatives of the parties, which shall constitute the necessary
amendments to the Contract. Possible increase or decrease in the Contract Price
shall be calculated in accordance with unit prices (inclusive of administration
costs) or budget prices if such prices are available, otherwise as per the
Builder's customary price for such work.
If
modifications or changes are made without such written agreement as aforesaid,
or if the Builder fails to notify the Buyer in writing without undue delay
that
there are modifications or changes which will require an increase in the
Contract Price, delayed delivery, changes in the Vessel's characteristics or
other changes in the Contract, the Builder will not be entitled to any increase
in the Contract Price, adjustment of Delivery Date or other adjustments, and
the
Contract will remain unchanged.
The
Builder is entitled to make minor modifications or changes to the
Specifications, if found necessary to suit the Builder's local conditions or
facilities, the availability of materials and equipment, the introduction of
improvement methods or otherwise, provided that the Builder shall first obtain
the Buyer's approval, which shall not be unreasonably withheld or
delayed.
2. Change
in Rules and Regulations
If,
after
the Date of Contract, there are any changes in the rules, regulations and
requirements (including official changed application of the rules) of Class
or
NMD, the following shall apply:
(a) The
Builder shall as soon as possible notify the Buyer thereof, and the
Builder
shall be obliged - except as otherwise agreed - to carry out the required
changes in accordance with the provisions set out below, provided always that
any changes in such rules, regulations or requirements which are approved and
published before the Contract is declared effective, and which apply mandatory
to the Vessel on or before the Contract Delivery Date shall not give to the
Builder a right to claim any adjustments of the price, delivery date or other
contract terms.
(b) If
such
change is or will be compulsory for the Vessel, the Builder shall incorporate
such alteration or change into the construction of the Vessel, unless otherwise
instructed by the Buyer. The parties shall endeavour to agree on such
adjustments to the Contract as set out in clause 1 above, failing which, the
changes to the Contract shall be decided by arbitration in accordance with
Article XIX.
(c) If
such
change is not or will not be compulsory for the Vessel, but the Buyer
nevertheless desires to incorporate such change, this shall be considered a
change or modification, as provided for in clause 1 of this Article
VI.
3. Substitution
of Materials
If
any of
the materials required by the Specifications or the Maker's List cannot be
procured in time or are in short supply, the Builder may, in order to maintain
the Delivery Date and subject to the Buyer's approval, which shall not
unreasonably be withheld and which shall be provided without undue delay, supply
other materials capable of meeting the requirements of the Classification
Society or Regulatory Bodies. No extra charges shall be made to the Buyer and,
except that any savings shall be credited to the Buyer, the Contract shall
remain unaltered.
ARTICLE
VII TEST
AND TRIALS
1. Notice
The
Builder shall before delivery, by not less than 7 days written notice to the
Buyer, notify the time and place for the sea trial for the Vessel. The Buyer
shall have its Representative onboard the Vessel to witness the sea trial.
Failure by the Representative to attend at the sea trial without any valid
reason despite a notice to the Buyer as aforesaid, shall be deemed to be a
waiver by the Buyer of its right to be present.
The
Builder may after due notice conduct the sea trial without the Representative
of
the Buyer being present, provided a representative of the Classification Society
is present, and in such case the Buyer shall be obligated to accept the results
of the sea trial on the basis of a certificate of the Builder confirmed by
the
Classification Society and/or Regulatory Bodies stating the results of the
sea
trial.
2. Weather
Conditions
The
sea
trial shall be carried out under weather conditions as set out in the
Specifications. Any delay in delivery caused by delay of the sea trial due
to
unfavourable weather conditions shall be considered Permissible
Delay.
3. How
conducted
The
sea
trial shall be carried out in the presence of representatives from the
Classification Society and/or Regulatory Bodies, and shall be conducted in
the
manner described in the Specifications, and shall be sufficient in scope and
duration to enable all parties to verify and establish that all elements are
functioning in accordance with the Contract.
All
expenses in connection with the sea trial shall be for the account of the
Builder, including without limitation all necessary crew.
4. Method
of Acceptance or Rejection
(a) Upon
completion of the sea trial and when the trial results are available, and if
the
Builder considers the results thereof demonstrates that the Vessel conforms
with
the Contract, the Builder shall immediately give the Buyer a written notice
of
completion stating when the Vessel is ready for delivery. The Buyer shall within
48 consecutive hours after
receipt of this notice and the test results notify the Builder in writing of
its
acceptance or rejection of the Vessel.
(b) If
the
results of the sea trial demonstrate that the Vessel or any part or equipment
thereof does not conform to the requirements of the Contract, or if the Buyer
for other valid reasons rejects the Vessel, the Builder shall take all necessary
steps to rectify such non-conformity. If necessary the Builder shall for its
own
account carry out a further sea trial in accordance with Article VII to
ascertain that the Vessel complies with the terms of the Contract. Upon
demonstration by the Builder that the deficiencies have been corrected, a notice
thereof and of the readiness of the Vessel for delivery, shall be given to
the
Buyer, who shall then within 48 consecutive hours after receipt of such notice
together with the new test results notify the Builder of its acceptance or
rejection.
(c) If
the
Buyer for any reason rejects the Vessel, the Buyer shall in its notice of
rejection give particulars of its reason therefore in such detail as can be
reasonably required.
(d) The
Buyer
shall not be obliged to take delivery of the Vessel if it is not fully in
conformity with the Contract, or if there are any conditions or recommendations
imposed by the Classification Society and/or Regulatory Bodies. However, if
the
deficiencies or the conditions/recommendations are of minor importance, and
the
Builder is unable to rectify the matter within a reasonable time, the Builder
may nevertheless require the Buyer to take delivery of the Vessel,
provided:
(i) the
Builder undertakes for its own account to remedy the deficiency or fulfil the
requirement within 12 months after the delivery of the Vessel..
(e) If
the
Builder disputes the rejection by the Buyer, the case shall be submitted for
final decision by arbitration in accordance with Article XIX
hereof.
5. Effect
of Acceptance
Acceptance
of the Vessel as provided above, shall be final and binding and shall preclude
the Buyer from refusing formal delivery on basis of any alleged deficiency
in
any part or parts of the Vessel which were tested during the sea trial, provided
all other procedural requirements for delivery have been met.
6. Disposition
of Surplus Consumable Stores
Any
fuel
oil, unused lubricating oil, grease, fresh water or other consumable stores
furnished by the Builder for the sea trial, remaining onboard the Vessel at
the
time of delivery shall be purchased by the Buyer from the Builder at the
original net purchase price thereof (Builder to provide supporting invoices),
and payment therefore shall be effected by the Buyer on Delivery and Acceptance
of the Vessel.
ARTICLE
VIII DELIVERY
DATE AND DELIVERY
1. Time
and Place
The
Vessel shall be delivered at the Builder’s yard (see Article II) or in the
vicinity thereof free and clear of all liens, claims, mortgages and other
encumbrances in a clean and seaworthy condition, ready for service, on
November
30th
2007
(the
Contract Delivery Date). Subject the contract is declared effective within
March
31st
2006.
Except
for the contracted delivery date is that in the event of net delays in the
construction of the Vessel or any performance required under the Contract due
to
causes which under the terms of the Contract permit postponement of the Delivery
Date (Permissible Delay), the Delivery Date shall be postponed accordingly.
The
Yard
is to organise and arrange a party when delivering the Vessel. The Buyer and
the
Builder to split the cost for the party in accordance with the number of guest
invited for each parties.
2. When
and how effected
Provided
that the Buyer has fulfilled all of its obligations under the Contract, delivery
of the Vessel shall be effected forthwith upon acceptance thereof by the Buyer
by the concurrent delivery by each of the parties hereto to the other of a
Protocol of Delivery and Acceptance signed by each party. Both parties have
the
right to make reservations or notes in the Protocol, or in a separate document
signed by the parties "for acknowledgement of receipt only".
3. Documents
to be delivered to the Buyer
Upon
delivery and acceptance of the Vessel, the Builder shall provide and deliver
to
the Buyer at its expense the following documents, which shall accompany the
Protocol of Delivery and Acceptance:
(a) Protocol
of Trials
made
pursuant to the Specifications.
(b) Protocol
of Inventory and Equipment of
the
Vessel, including spare parts and the like, all as specified in the
Specifications.
(c) Protocol
of Surplus Consumable Stores
referred
to under Article VII hereof which are payable by the Buyer to the
Builder.
(d) Drawings
and Plans
pertaining to the Vessel together with all necessary instruction manuals, as
further stipulated in the Specifications.
(e) All
Certificates including
the Builder's
Certificate
required
to be furnished upon Delivery and Acceptance of the Vessel pursuant to the
Contract and the Specifications. It is agreed that if, through no fault on
the
part of the Builder, the Classification Certificate and/or other required
certificates are not available at the time of delivery, provisional certificates
shall be accepted by the Buyer, provided that the Builder at its expense shall
furnish the Buyer with final certificates as promptly as possible. If final
certificates are not provided or obtained within a reasonable time, the Builder
shall compensate the Buyer for any damages, losses and extra expenses caused
thereby.
(f) Declaration
of Warranty
by the
Builder that the Vessel is free and clear of any liens, claims, charges,
mortgages and other encumbrances.
(g) Commercial
invoice
(h) Xxxx
of Sale
or other
relevant document that certifies that the title of the Vessel passes to the
Buyer.
4. Title
and Risk
Title
to
and risk of loss of or damage to the Vessel shall pass to the Buyer upon
Delivery and Acceptance thereof by the Buyer.
5. Removal
of Vessel
The
Buyer
shall take possession of the Vessel immediately upon Delivery and Acceptance
thereof, and shall remove the Vessel from the premises of the Builder within
three (3) days after the Delivery and Acceptance as aforesaid. If the Buyer
does
not remove the Vessel within the said period, the Buyer shall thereafter pay
to
the Builder reasonable mooring charges for the Vessel.
ARTICLE
IX DELAYS
AND EXTENSION OF TIME FOR DELIVERY (FORCE MAJEURE)
1. Cause
of Delay
(a) In
case
of Force Majeure Delay, the Delivery Date shall be postponed by the number
of
days corresponding to the net delay in delivery as set out below. It shall
be
considered a Force Majeure Delay if the Delivery and Acceptance of the Vessel
is
prevented or delayed as a consequence of extraordinary circumstances or events
beyond the Builder's control, such as:
Acts
of
God; acts of princes and rulers; requirements of government authorities; war
or
warlike condition, civil commotion or riots, mobilisation; sabotage; strike
or
lockout (except local labour disturbances at the Builder's yard) quarantines;
flood, typhoons, hurricanes, storms or other extraordinary weather conditions
not included in normal planning; earthquakes, tidal waves, landslide; fires,
explosions, collisions or stranding; import or export bans or restrictions;
prolonged failure, shortage or restriction of electrical current, oil or gas;
and/or:
any
other extraordinary events beyond the control of the Builder;
and/or:
by late
delivery of major parts or of important performance by Subcontractor(s) where
the cause of delay would have been recognised as Force Majeure Delay under
this
Article IX if it had affected the Builder, provided that the Builder has shown
due diligence in its choice of Subcontractor and ensured a reasonable margin
for
delays, so that at the time of ordering same it could reasonably be expected
by
the Builder to be delivered in time;
and/or:
delays
in the Builder's other commitments resulting from Force Majeure as herein
described directly causing delay of the Builder's performance
hereunder;
Provided
always:
that
there shall be no Force Majeure Delay if such delay could reasonably have been
foreseen or anticipated by the Builder on the Date of Contract, or that it
could
have been prevented or overcome by the exercise of due diligence by the Builder,
its servants, employees or Subcontractors.
(b) The
provisions under sub-clause (a) above apply whether or not the Force Majeure
occurs after the Contract Delivery Date.
(c) The
Builder is obliged to do its utmost to avoid or minimise the Force Majeure
Delay.
2. Notice
of delay
(a) Within
10
days after the Builder becomes aware or should have become aware of any cause
of
delay as aforesaid, on account of which the Builder will claim that it is
entitled under the Contract to postpone the Delivery Date, the Builder shall
notify the Buyer in writing or by telefax, confirmed by registered mail, of
the
date such cause of delay commenced. Likewise, within 10 days after the date
such
cause of delay ended, the Builder shall notify the Buyer in writing or by
telefax, confirmed by registered mail, of the date when such cause of delay
ended.
Failure
by the Builder to give such notices as aforesaid shall prevent the Builder
from
subsequently claiming Force Majeure Delay on account of such
circumstances.
(b) The
Builder shall notify the Buyer of the period, by which the Delivery Date is
postponed by reason of such cause of delay, with all reasonable despatch after
it has been determined. Failure by the Buyer to object to the Builder's claim
for postponement of the Delivery Date within 10 days after receipt by the Buyer
of such notice shall be deemed to be a waiver by the Buyer of its right to
object to such postponement of the Delivery Date for the net delay caused by
the
Force Majeure event, provided always that the Builder's information in respect
of the cause of the delay and the consequences thereof were correctly stated
in
the notice.
3. Permissible
Delay
Delays
on
account of such causes as specified in this Article IX, Clause 1 and in Article
VI hereof and any other delays caused by non fulfilment by the Buyer of the
Buyer's obligation hereunder or any other delays of a nature which under the
terms of this Contract permit postponement or extension of the Delivery Date
shall constitute Permissible Delay and shall extend the Delivery Date for any
net delay caused thereby.
ARTICLE
X WARRANTY
OF QUALITY
1. Extent
of Builder's responsibility
Save
as
provided for below, and provided always that the deficiencies have been
rectified within a reasonable time, the Builder shall have no responsibility
for
defects or the consequences thereof (including loss of profit and loss of time)
discovered after the Delivery and Acceptance of the Vessel.
2. Guarantee
The
Builder undertakes to repair and rectify at its own cost and expense and free
of
charge to the Buyer, any defects - including latent defects or deficiencies
-
concerning the Vessel or parts thereof, which are caused by faulty design,
defective material and/or poor workmanship on the part of the Builder, its
servants, employees or Subcontractors, but excluding defects arising after
delivery due to normal wear and tear or improper handling of the Vessel or
caused or aggravated by omission or improper use or maintenance of the Vessel
on
the part of the Buyer, its servants or agents and excluding Buyer's
Supplies.
The
Builder's liability as stated herein shall terminate if the defects as aforesaid
have not been discovered within the Guarantee Period of 12 months. or any longer
period which is obtained from any of the subsuppliers of equipment to this
Contract.
Any
such
defects shall be notified to the Builder as soon as possible after discovery,
and at the latest within 8 days after expiry of the Guarantee Period. Such
notice shall include particulars of the deficiency in such detail as can
reasonably be expected.
If
defects could only be discovered on dry docking the vessel, notice of such
defect(s) need not be tendered before the Vessel is in the dock, but must be
tendered before the Vessel leaves the dry-dock.
The
Guarantee Period will be extended in the following cases:
(a) After
repair and rectification under this Article X has been carried out, there will
be a further period of guarantee of 6 months limited to 24 months from the
delivery of the Vessel, for the repaired and rectified items. The further
Guarantee Period shall, however, not be less than the original Guarantee Period
for any such item. Such additional guarantee period will be granted on all
remedial works notified by the Buyer to the Builder in the Guarantee Period,
or
any extension thereof. The Buyer shall, however, not be entitled to such
additional guarantee for deficiencies caused by poor workmanship if the
guarantee work has not been performed by the Builder or their Subcontractors.
(b) If
as a
result of guarantee works the Vessel has been lying idle in the Guarantee Period
for an accumulated period of 30 days or more, the Guarantee Period shall be
extended by the total number of days the Vessel has been lying idle, whether
or
not other work is carried out during such period.
3. Rectification
of Defects
If
the
Builder is liable for defects as aforesaid, its obligations shall be as
follows:
(a) The
Builder shall rectify the defect or cause the defect to be rectified at its
own
costs. Provided the defect is remedied within a reasonable time, the Builder
shall have no other liability for any damage or loss caused as a consequence
of
the defect, except for repair or renewal of the Vessel's part/parts that have
been damaged as a direct and immediate consequence of the defect without any
intermediate cause, and provided such part or parts can be considered to form
a
part of the same equipment or same system. The Builder shall in any event not
be
liable for any consequential losses as stated herein over and above USD
100.000,-.
(b) The
repairs, replacements and/or rectifications shall be made at the Builder's
yard.
However,
the Buyer may, after having notified the Builder in writing, cause the necessary
repairs, replacements and/or rectifications to be carried out elsewhere. In
such
case, the Builder shall at its own costs be entitled to forward necessary
replacement parts or materials.
The
Builder's liability shall in such case be limited to pay the cost of repairs
including travelling and forwarding expenses (unless paid by Subcontractors),
but limited to the price of the work which the Builder would normally charge
at
its yard.
In
any
case, the Builder shall co-operate with the Buyer to find proper solutions
to
rectify the deficiency.
(c) The
Vessel shall in any case be taken at the Buyer's cost and expense to the place
elected for repair and modification, ready for such repairs and modifications.
Docking expenses and access works being necessary for performance of the
guarantee work shall be for the Builder's account.
(d) The
Builder shall have the ownership of replaced parts. The Buyer will return such
parts to the Builder at Builder's request and at Builder's expense. If the
Builder fails to present such request within a reasonable time, the Buyer has
no
responsibility for the replaced parts.
4. Subcontractors'
Guarantees
The
Builder shall - upon the Buyer's request - assign to the Buyer any rights the
Builder may have against any Subcontractors, including any right to pursue
any
claim under the relevant subcontract. This provision shall in no way alter
or
diminish the Builder's obligations under the Contract.
The
Builder shall endeavour to have provisions in the subcontracts whereby the
Buyer
may claim against the Subcontractor directly.
5. Assignment
If
the
Buyer sells the Vessel during the Guarantee Period and wishes to assign its
rights hereunder, such assignment shall be subject to the Builder's consent,
which shall not be unreasonably withheld or delayed.
6. The
Guarantee Engineer
The
Builder shall have the right and the Buyer may require the Builder to appoint
a
Guarantee Engineer to serve onboard the Vessel for such portion of the guarantee
period as the Builder or Buyer may decide. The Buyer and its employees shall
provide the Guarantee Engineer with full co-operation in carrying out his
duties. The Buyer shall accord the Guarantee Engineer treatment and
accommodation comparable to the Vessel's Chief Engineer, at no cost to the
Builder. The Buyer shall pay to the Builder the same wages as a European Chief
Engineer as compensation for part of the cost and charges to be borne by the
Builder in connection with the Guarantee Engineer, and also direct expenses
of
repatriation by air to the Guarantee Engineer's home country.
The
Guarantee Engineer shall, at all times and in all respects, be deemed to be
the
employee of the Builder. The Buyer shall be under no liability whatsoever to
the
Builder or to the Guarantee Engineer for personal injuries, including death,
suffered by the Guarantee Engineer during the time when he is on board the
vessel, unless such personal injuries, including death, were caused by gross
negligence of the Buyer, or of any of its employees or agents. Nor shall the
Buyer be under any liability whatsoever to the Guarantee Engineer for damage
to
or loss or destruction of property of the Guarantee Engineer, unless such
damage, loss or destruction is caused by gross negligence of the Buyer, or
of
any of its employees or agents. The Guarantee Engineer shall if requested sign
a
Letter of Indemnity required by the Buyer.
ARTICLE
XI OWNERSHIP,
RISK AND INSURANCE
1. Ownership
and Registration
The
Buyer
shall become the owner of the Vessel upon Delivery and Acceptance
thereof.
The
Builder may mortgage the Vessel and its materials (excluding Buyer's Supply
if
possible) as security for the construction financing, including the provision
of
refund guarantee(s), for the Vessel. The Buyer shall if necessary give its
consent for that purpose. Any such mortgage shall be cancelled and deleted
from
the relevant registry at the latest on Delivery and Acceptance.
Any
materials, parts, machinery or equipment purchased by the Builder and
appropriated for the Vessel which are not utilised for the Vessel shall remain
the property of the Builder after Delivery and Acceptance of the
Vessel.
If
the
Builder's yard is in Norway, the Buyer may register the Contract and the Vessel
under construction in accordance with the rules of the Norwegian Maritime Act
with the Builder as title holder.
2. Risk
and Insurance
(a) Until
Delivery and Acceptance, the Builder bears the risk of loss of or damage to
the
Vessel, materials, parts, machinery, boilers and equipment.
(b) The
Builder will arrange and pay for building insurance (which shall include Buyers
Supplies) with underwriters acceptable to the Buyer on customary "All Risk"
terms. The insurance shall comprise necessary fire and transport insurance
of
material and equipment which the Builder procures from Subcontractors. Except
as
otherwise agreed the Builder is not obliged to insure the transport of Buyer's
Supplies.
The
insured amount shall as a minimum cover the aggregate of the instalments paid
by
the Buyer pursuant to Article III from time to time together with interest
thereon and the value of any Buyer's Supplies.
By
paying
extra insurance premiums the Buyer may require that the building insurance
is
increased to cover the rebuilding value at any time.
The
Buyer
shall receive copies of the policies.
(c) (i) The
insurance policies shall be taken out in the joint names of the Builder and
the
Buyer.
(ii) The
Builder may collect directly from the insurance company any sums in respect
of
its own losses.
(iii) In
the
event of partial damage which is to be repaired and which is recoverable under
the insurance policies, the Builder may collect advance instalments under the
policy payable as the repair work progresses.
The
proceeds recovered under the insurance policies shall be applied to repairs
satisfactory to the Class and Regulatory Bodies, and the Buyer shall accept
the
Vessel under the Contract if completed thereafter in compliance with the
Contract.
(iv) If
prior
to its delivery the Vessel sustains such heavy damages that the Builder has
no
obligation to rebuild the Vessel, or if the parties and the insurance company
agree on total / constructive / compromised total loss then the proceeds under
the insurance shall be paid as follows:
(a) The
Buyer
will recover directly from the insurance company an amount equal to the
instalments paid together with interests in accordance with the terms of the
Contract.
The
Buyer
will further collect direct from the insurance company any extra proceeds
recoverable under an insurance policy taken out for Buyer's account in
accordance with Article XI clause 2 (b) above.
The
Buyer
shall further collect payment for Buyer's Supplies covered by the insurance
policies.
(b) The
remaining part of the insurance proceeds shall be paid to the
Builder.
(c) Notwithstanding
the above; should the parties agree to continue with the Contract and rebuild
the Vessel, the proceeds of the insurance policies shall be paid to the Builder
as set out in this Article XI clause 2 (c) (iii) above. Such contract will
include a possible revised Delivery Date.
(d) The
Builder shall for its own account insure the Vessel on terms that are normally
used for insuring vessels under construction at Norwegian yards. This building
insurance shall be maintained until the Vessel is delivered to and taken over
by
the Buyer.
(e) War
risk
insurance for the Vessel with accessories shall be taken out only at the request
of the Buyer and for its account.
ARTICLE
XII DEFAULT
PROVISIONS
1. Builder's
Default - Cancellation by Buyer
The
payment of any sums under this Contract by the Buyer prior to delivery of the
Vessel shall be by way of advances to the Builder. In the event that the Buyer
shall exercise its right of cancelling the Contract under and pursuant to any
of
the provisions of the Contract specifically permitting the Buyer to do so,
then
the Buyer shall notify the Builder in writing or by telefax confirmed by
registered mail, and such cancellation shall be effective as of the date notice
thereof is received by the Builder.
Upon
such
cancellation the Builder shall promptly either accept the notice of cancellation
, or declare its intention to dispute the same under the provisions of Article
XIX hereof.
Upon
cancellation the Builder shall refund all sums paid by Buyer to the Builder
under Article III hereof, including interest thereon at the rate of 3 months
Nibor plus 1,5% (per cent) per annum from the date of payment to the date of
refund. The Builder shall also return Buyer's Supplies, or if they cannot be
returned, the Builder shall pay to the Buyer an amount equal to the Buyer's
costs for such equipment.
Save
for
the Builder's obligation to refund amounts as set out above, the Builder shall
have no liability for any other loss suffered by the Buyer caused by a
cancellation pursuant to this Article XII, clause 1, first
paragraph.
2. Buyer's
Default - Disputes regarding Payment
(a) If
the
Buyer fails to make payments provided for in Article IV clause 3, the Builder
shall by written notice or by telefax confirmed by registered mail to the Buyer
request payment of the unpaid amount. If the amount has not been paid within
7
Banking Days from receipt of such notice, the Builder may postpone the
commencement of or stop the work on the Vessel and enforce payment of the claim,
the net loss of time caused thereby being Permissible Delay under the
Contract.
(b) If
21
days have elapsed from the receipt of the above notice without the Buyer having
paid or provided acceptable security, the Builder may cancel the
Contract.
In
either
case the Builder may claim compensation for losses caused thereby.
Notwithstanding
the above, if there is a dispute in respect of the Buyer's payment obligation,
the Builder has no right to postpone the commencement or stop the work or cancel
the Contract, if the Buyer provides security acceptable to the Builder for
the
disputed unpaid amount.
3. Insolvency
If
proceedings are commenced by or against the Buyer or Builder for winding up,
dissolution or reorganisation (except in case of merger) or for the appointment
of a receiver, trustee or similar officer, or if bankruptcy is opened, the
party
who is not subject to such proceedings shall have the right to cancel this
Contract.
Upon
such
cancellation, the Builder shall refund all sums paid by Buyer to the Builder
under Article III hereof, including interest thereon at the rate of 3 months
Nibor plus 1,5% (per cent) per annum from the date of payment to the date of
refund. The Builder shall also return Buyers Supplies, or if they cannot be
returned, the Builder shall pay to the Buyer an amount equal to the Buyer's
costs for such equipment.
Save
as
for the Builder's obligation to make refund as set out above, neither the
Builder nor the Buyer shall have any liability for losses suffered by the other
party caused by the cancellation pursuant to this Article XII, clause
3.
ARTICLE
XIII ASSIGNMENT
Neither
of the parties hereto shall assign the Contract to a third party unless prior
consent of the other party is given in writing, such consent not to be
unreasonably withheld.
The
Contract shall endure to the benefit of and shall be binding upon the lawful
successors or the legitimate assigns of either of the parties
hereto.
ARTICLE
XIV TAXES
AND DUTIES
1. Taxes
and Duties in the country of the Builder
The
Builder shall bear and pay all taxes and duties imposed in the country of the
Builder in connection with the execution and/or performance of the Contract,
excluding any taxes and duties imposed in the country of the Builder upon the
Buyer's Supplies.
2. Taxes
and Duties outside the country of the Builder
The
Buyer
shall bear and pay all taxes and duties imposed outside the country of the
Builder in connection with the execution and/or performance of the Contract,
except for taxes and duties imposed upon those items to be procured by the
Builder for construction of the Vessel.
ARTICLE
XV PATENTS,
TRADEMARKS, COPYRIGHTS
Machinery
and equipment of the Vessel may bear the patent numbers, trademarks or trade
names of the manufacturers.
The
Builder shall defend and hold harmless the Buyer from patent, trade xxxx,
copyright or other intellectual property liability or claims of any nature
or
kind, including costs and expenses for, or on account of any intellectual
property rights made or used in the performance of the Contract, or the Buyer's
use of the Vessel, and also including costs and expenses of litigation, if
any.
Nothing
contained herein shall be construed as transferring any patent or trademark
rights or copyright in equipment covered by the Contract, and all such rights
including the design of the Vessel are hereby expressly reserved to the true
and
lawful owners thereof.
The
Builder's warranty hereunder does not extend to the Buyer's
Supplies.
ARTICLE
XVI BUYER'S
SUPPLIES
1. Responsibility
of Buyer
(a) The
Buyer
shall, at its own risk, cost and expense, supply and deliver to the Builder
all
of the items to be furnished by the Buyer, as specified in the Specifications
and as defined in Article I, at warehouse or other storage facility of the
Builder in a proper condition ready for installation in or on the Vessel, in
accordance with the time schedule designated and advised by the Builder to
the
Buyer.
(b) In
order
to facilitate installation by the Builder of the Buyer's Supplies in or on
the
Vessel, the Buyer shall furnish the Builder with necessary specifications,
plans, drawings, instruction books, manuals, test reports and certificates
required by all applicable rules and regulations. If so reasonably requested
by
the Builder, the Buyer shall without any charge to the Builder, provided always
that such installation is not Builder's responsibility pursuant to the
Specifications, cause the representatives of the manufacturers of the Buyer's
Supplies to assist the Builder in installation thereof in or on the Vessel
and/or to carry out installation thereof by themselves or to make necessary
adjustments at the Builder's yard.
(c) Any
and
all of the Buyer's Supplies shall be subject to the Builder's reasonable right
of rejection, when and if they are found to be unsuitable or in improper
condition for installation.
(d) Should
the Buyer fail to deliver any of the Buyer's Supplies within the time
designated, the Delivery Date shall be automatically extended for the period
by
which the failure actually caused a delay in the delivery of the
Vessel.
(e) If
delay
in delivery of any of the Buyer's Supplies exceeds thirty (30) days, then the
Builder shall be entitled to proceed with construction of the Vessel without
installation thereof in or on the Vessel as hereinabove provided, and the Buyer
shall accept and take delivery of the Vessel so constructed, unless such delay
is caused by Force Majeure in which case the provisions of Article XVI, 1(d)
shall apply.
2. Responsibility
of Builder
The
Builder shall be responsible for storing and handling with due diligence the
Buyer's Supplies after delivery thereof at the Builder's yard, and shall, at
its
own cost and expense, install them in or on the Vessel, unless otherwise
provided herein or agreed by the parties hereto, provided, always, that the
Builder shall not be responsible for the quality, efficiency and/or performance
of any of the Buyer's Supplies.
ARTICLE
XVII NOTICES
1. Address
Any
and
all notices and communications in connection with the Contract shall be
addressed as follows:
To
the Buyer: Trico
Shipping AS
Telephone x00
00 00
00 00
Telefax x00
00 00
00 00
E-mail
xxxxxxxx@xxxxxxxxxxx.xx
To
the Builder: Solstrand
AS
Telephone x00
00 00
00 00
Telefax x00
00 00
00 00
E-mail xxxx@xxxxxxxxx.xx
2. Language
Any
and
all written notices and communications in connection with the Contract shall
be
in the English language.
ARTICLE
XVIII ENTIRE
CONTRACT
The
Contract contains the entire contract and understanding between the parties
hereto and supersedes all prior negotiations, representations, undertakings
and
agreements on any subject matter of the Contract.
ARTICLE
XIX GOVERNING
LAW, DISPUTE AND ARBITRATION
1. Governing
Law
The
parties hereto agree that the validity and interpretation of the Contract and
of
each Article and part thereof shall be governed by the laws of the Kingdom
of
Norway.
2. Arbitration
Any
dispute between the parties concerning the Contract shall be settled with final
and binding effect for both parties by Arbitration in Bergen, Norway. The
parties will jointly appoint three arbitrators of which at least one shall
be a
lawyer admitted to practice in Norway. If the parties fail to agree on the
choice of arbitrators within 14 days from presentation by either party of a
written demand for arbitration, each party shall appoint one arbitrator, and
the
two so appointed shall appoint a third arbitrator who shall act as the chairman
of the arbitration panel. If a party fails to appoint an arbitrator within
14
days after he has been requested to do so by the other party, the Chief Justice
of the Appeal Court in the district where the Builder has its venue shall at
the
request of either party appoint the arbitrator(s).
The
Contract with its Appendices and Exhibits has been drawn up in two identical
originals, one for each party.
This
Contract is signed with the following subjects to both parties:
| - |
Bank’s
approval
|
| - |
Board’s
approval
|
| - |
Subject
to be lifted with March
31st
2006.
|
Appendices:
| - |
GA
plan from Marin Teknikk AS No. 0000-000-000 plotted 02.03.2006
|
| - |
Specification
from Marin Teknikk AS dated 02.03.2006
|
| - |
Makers
List dated March 20th
2006
|
| - |
Option
Agreement dated March 20th
2006
|
Tomrefjord,
the 20th
of March
2006.........
.................................................................. ..............................................................
SOLSTRAND
AS
TRICO
SHIPPING AS
