Contract
The
portion of this Exhibit 10.11 marked “******” has been omitted and
confidentially filed with the Securities and Exchange Commission pursuant
to
Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as
amended.
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SHIPSALES CONTRACT
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FOR
PURE
CAR
TRUCK CARRIER VESSEL
(HULL
NO.
2253)
MADE
BY
AND BETWEEN
CLIO
MARINE INC.
AND
EAST
GULF
SHIPHOLDING, INC.
CONTENTS
ARTICLE
I - DESCRIPTION
AND CHARACTERISTICS
ARTICLE
II - CONTRACT
PRICE AND PAYMENT
ARTICLE
III - ADJUSTMENT
OF CONTRACT PRICE
ARTICLE
IV - SUPERVISION
AND INSPECTION
ARTICLE
V - MODIFICATIONS,
CHANGES AND SUBSTITUTION
ARTICLE
VI - BUYER’S
SUPPLIES
ARTICLE
VII - TRIALS
ARTICLE
VIII - DELIVERY
ARTICLE
IX - FORCE
MAJEURE
ARTICLE
X - WARRANTY
OF QUALITY
ARTICLE
XI - INSURANCE
ARTICLE
XII - BUYER’S
DEFAULT
ARTICLE
XIII - SELLER’S
DEFAULT
ARTICLE
XIV - ARBITRATION
ARTICLE
XV - ASSIGNMENT
OF CONTRACT
ARTICLE
XVI - TAXES
AND DUTIES
ARTICLE
XVII - PATENTS,
TRADE MARKS, COPYRIGHTS
ARTICLE
XVIII - INTERPRETATION
ARTICLE
XIX - NOTICE
ARTICLE
XX
- EFFECTIVE DATE
2
SHIPSALES
CONTRACT
This
CONTRACT, made and entered into
this __ 21st day of September, 2007, by and between
CLIO MARINE INC., a corporation organized and existing under the laws of Liberia
(hereinafter called the "Seller") and EAST GULF SHIPHOLDING, INC., a corporation
organized and existing under the laws of Xxxxxxxx Islands (hereinafter called
the "Buyer").
Witnesseth:
In
consideration of the mutual covenants contained herein, the Seller agrees to
cause ******, a corporation organized and existing under the laws of ******,
(hereinafter called the "Builder"), to construct, launch, equip and complete
one
(1) Pure Car Truck Carrier Vessel identified in Article I.(hereinafter called
the "Vessel") hereof at its ****** (hereinafter referred to as the "Shipyard"),
and to sell and deliver the same to the Buyer at the Shipyard and the Buyer
agrees to purchase from the Seller and to take delivery of the Vessel, upon
the
terms and conditions hereinafter set forth. It is agreed and understood that
the
Seller may at its discretion construct and deliver the Vessel at Builder's
shipyard in Japan other than the Shipyard mentioned above, provided that the
provisions of this Contract shall not be altered thereby in any other
respects.
3
ARTICLE I
- DESCRIPTION AND CHARACTERISTICS
I) DESCRIPTION
Subject
to the provisions hereof the Vessel shall be of the following description:
Pure
Car Truck Carrier Vessel of about 6,400 cars, which shall have the Builder's
Hull
Number
2253, shall be documented under the Panamanian flag to be
registered at Republic of Panama at the Buyer's expense, and shall be
constructed, launched, equipped and completed in accordance with the provisions
of this Contract and the Specifications and the accompanying plans to the
Specifications identified by D.No.23-7109A (hereinafter collectively referred
to
as the "Specifications" or the "Specifications and Plans") signed by both
parties for identification purpose and attached to this Contract as an integral
part hereof.
2) CHARACTERISTICS
AND DIMENSIONS
The
Vessel shall have the following characteristics and dimensions:
Length,
over
all less
than 200.00 m
Length,
between
perpendiculars 192.00
m
Breadth,
moulded 32.26
m
Depth,
moulded (to Strength Dk: Garage
Deck) 34.52
m
Depth,moulded
(to Freeboard Dk:No,7 Car
Deck) 14.70
m
Designed
draught,
moulded 8.80
m
Xxxxxxxxx
draught,
moulded 9.70
m
Machinery Mitsubishi-UE
Type Diesel Engine,Model “7UEC60LSII (P/U)”—1 setMaximum rating
(BHP)
14,315kW
(19,460PS) x 105.0
min-1Normal rating (BHP)
12,170kw
(16,540PS) x 99.5
min-1
Trial
speed,
guaranteed 21.45
knots at Normal rating (BHP)12,170kw (16,540PS) at99.5 min-1of main engine
on
about 20,000 metricton displacement
4
Fuel
Consumption,
guaranteed 166.6gr/kW/hr
at 12,170kW (16,540PS) of main engine only onthe basis of fuel oil of 42,700
kJ/kg (10,200 kcal/kg) in
lower calorific value with 3%
tolerancemargin at I.S.O. condition.
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Number
of loadable cars guaranteed
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5,200
cars of standard
car determined
on the “CAR LOADING PLAN”
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The
details of the above particulars as well as the definitions and method of
calculations and measurements are as stated in the Specifications.
3) CLASSIFICATION.
RULES AND REGULATIONS
The
Vessel, including its machinery,
equipment and outfittings shall be constructed in accordance with the rules
and
regulations (the edition and amendments thereto being current as of the date
of
execution of this Contract) and under special survey of Nippon Kaiji Kyokai
(hereinafter called "Classification Society"), and shall be distinguished in
the
register by the symbol ofNS*(RORO EQ C V), MNS* (MO).
Decisions
of the Classification Society as to compliance or non-compliance with the
Classification shall be final and binding upon both parties hereto.
The
Vessel shall also comply with the rules and regulations as described in the
Specifications.
All
fees
and charges incidental to the Classification and with respect to compliance
with
the above referred rules and regulations shall be for the account of the
Builder.
5
ARTICLE II
- CONTRACT PRICE AND PAYMENT
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1)
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CONTRACT
PRICE
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The
purchase price of the Vessel shall be ****** (hereinafter referred to as the
"Contract Price") as the technical services required to be rendered to the
Buyer
under the terms of this Contract. The Contract Price shall be net receivable
by
the Seller in Tokyo and exclusive of articles to be supplied by the Buyer as
provided in Article VI hereof, and shall be subject to adjustment as hereinafter
provided in this Contract.
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2)
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DEFINITION
OF DUE DATE AND CURRENCY
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All
payments by the Buyer under this Contract shall be received by the Seller on
the
day each payment becomes due in Tokyo. All payments to the Seller under this
Contract shall be made in Japanese Yen.
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3)
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TERMS
OF PAYMENT
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The
Buyer
shall pay the Contract Price to the Seller in accordance with the following
terms and conditions:
(a)
First Installment
******
percent (******%) of the Contract Price, amounting to ****** shall be paid
to
the Seller upon ******.
(b)
Second Installment
******
percent (******%) of the Contract Price, amounting to ****** shall be paid
to
the Seller upon ******.
6
(c)
Third Installment
******
percent (******%) of the Contract Price, amounting to ****** shall be paid
to
the Seller upon ******.
(d)
Fourth Installment
The
sum
of ****** percent (******%) of the Contract Price, amounting to ******, plus
****** or minus ****** and/or ******, if any, plus the price of ******, shall
be
paid to the Seller upon ******.
4) METHOD
OF PAYMENT
(
a) 1st
Installment:
Within
two (2) Business Days (Business Day means a day, other than Saturday, Sunday
and
national holiday, on which the Builder, Seller and the Buyer are working and
on
which leading banks in Japan and New York are open for business of foreign
exchange, remittance and lending of money) after signing of this Contract,
the
Buyer shall pay the amount of this Installment by telegraphic transfer to a
bank
in Tokyo, Japan nominated by the Seller (hereinafter called the "BANK") for
the
account of the Seller.
(b)
2nd
Installment:
Within
two (2) Business Days after receipt by the Buyer of either fax or e-mail from
the Seller confirming the keel-laying of the Vessel, the Buyer shall pay the
amount of this Installment by telegraphic transfer to the BANK for the account
of the Seller.
7
(c)
3rd
Installment:
Within
two (2) Business Days after receipt by the Buyer of either fax or e-mail from
the Seller confirming the completion of the launching of the Vessel, the Buyer
shall pay the amount of this Installment by telegraphic transfer to the BANK
for
the account of the Seller.
(d)
4th
Installment:
The
Buyer
shall, at least three (3) Business Days prior to the scheduled delivery date
of
the Vessel subject of any changes to the delivery date in accordance with this
Contract, make a cash deposit with the BANK, covering the amount of this
Installment (as adjusted in accordance with the provisions of this Contract),
with an irrevocable instruction that the said amount shall be released to the
Seller's favour and account against presentation to the BANK by facsimile of
a
duly signed copy of the PROTOCOL OF DELIVERY AND ACCEPTANCE of the Vessel as
set
forth in Paragraph 3 of Article VII hereof. Any cost and expense related to
such
remittance and deposit shall be bourne by the Buyer.
No
payment under this Contract shall be delayed or withheld by the Buyer on account
of any dispute or disagreement of whatever nature arising between the parties
hereto.
8
ARTICLE III
- ADJUSTMENT OF CONTRACT PRICE
The
Contract Price shall be subject to adjustment as hereinafter set
forth:
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1)
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DELAYED
DELIVERY
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No
adjustment shall be made, and the Contract Price shall remain unchanged, for
the
first thirty (30) days of delay in delivery of the Vessel beyond the date
on which delivery is required under the terms of this Contract.
If
the
delivery of the Vessel is delayed more than thirty (30) days beyond the said
delivery date, the Contract Price shall be reduced by deducting there from
the
sum of ******, as liquidated damages, for each day of such delay beyond the
above said thirtieth (30th) day.
However,
unless the parties agree otherwise, the total reduction in the Contract Price
shall not exceed the amount due to cover the delay of one hundred and twenty
(120) days after the above thirtieth (30th) day as computed at the rate of
reduction specified in the above.
But,
if
the delay in delivery of the Vessel continues for a period of more than one
hundred twenty (120) days from the thirtieth (30th) day after the date on which
delivery is required under the terms of this Contract, the Buyer may, at its
option, rescind this Contract by serving upon the Seller a written notice of
rescission of this Contract.
Such
rescission shall be effective as of the date the notice thereof is received
by
the Seller, and the Seller, after receipt of such notice, shall refund to the
Buyer all installments paid by the Buyer, together with interest at two point
five percent (2.5%) over the long-term prime rate in Japan per annum from the
date of each payment. Such refund by the Seller to the Buyer of all installments
paid by the Buyer on account of the Vessel shall forthwith discharge all
obligations, duties and liabilities of each of the parties hereto to the other
under this Contract.
In
case
the Buyer has not served notice of rescission, the Seller shall immediately
after the expiration of such period of delay in delivery, propose a future
delivery date and demand
9
that
the
Buyer shall make an election. The Buyer shall, within fourteen (14) days after
such demand is received by the Buyer, notify the Seller by facsimile confirmed
in writing of its intention to rescind the Contract or of its consent to accept
the Vessel at an agreed future date, it being understood by the parties that
if
the Vessel is not delivered by such future date, the Buyer shall have the same
right of rescission upon the same terms as hereinbefore provided. If the Buyer
fails to notify the Seller of its intention to rescind the Contract as above
specified, within the aforementioned fourteen (14) days, the Buyer shall be
deemed to have consented to the delivery of the Vessel at the later date
proposed by the Seller.
For
the
purpose of this Paragraph, the delivery of the Vessel shall be deemed to be
delayed when and if the Vessel, after taking into full account extension of
the
delivery date by reason of permissible delays as herein provided, is not
delivered by the date upon which delivery is required under the terms of this
Contract.
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2)
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INSUFFICIENT
SPEED
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The
Contract Price of the Vessel shall not be affected or changed if the speed
of
the Vessel on trials, as determined in accordance with the Specifications,
is
less than the guaranteed speed of the Vessel, provided such deficiency is not
more than one-fifth (1/5) of one (I) knot below the guaranteed
speed.
In
the
event, however, that the deficiency in the speed exceeds one-fifth (1/5) of
one
(I) knot below the guaranteed speed, the Contract Price shall be reduced, as
liquidated damages, by ****** for such deficiency of each 0.1 knots (any
fractions to be pro-rated but disregarding fractions of one-hundredth
(11100) of one (I) knot).
If
the
deficiency of the Vessel's speed on trials exceeds one (1) full knot below
the
guaranteed speed, the Buyer at its option may accept the Vessel at a reduction
in the Contract Price as above specified for an insufficient speed of one (1)
full knot, that is at a total reduction of ******, or, subject to the provisions
of Paragraph 4) of Article VII, may reject the Vessel and rescind
this
10
Contract,
in which case the provisions in Paragraph 1) of this Article regarding the
Buyer's rescission of the Contract shall be applied.
3) EXCESSIVE
FUEL CONSUMPTION
The
Contract Price of the Vessel shall not be affected or changed if the fuel
consumption of the main engine at the normal output during the shop trial,
as
determined in accordance with the Specifications, does not exceed three (3)
percent above one hundred and sixty six point six grams per kilo watt per hour
(166.6gr/kW/hr) at 42,700kW of main engine only on the basis of fuel oil of
42,700 kJ/kg in lower calorific value at 1.S.0. condition.
In
the
event, however, that the fuel consumption exceeds three (3) percent, on the
above specified conditions, the Contract Price shall be reduced, as liquidated
damages by the sum of ****** for each full one (1) percent in excess of the
above said three (3) percent.
If
the
fuel consumption as above stated exceeds by seven (7) percent or more in excess
of the above said three (3) percent, the Buyer at its option may accept the
Vessel at a reduction in the Contract Price as above specified for a fuel
consumption in excess of seven(7) percent above said three (3) percent, that
is,
at a total reduction of ******, or, subject to the provisions of Paragraph
4) of
Article VII, may reject the Vessel and rescind this Contract, in which case
the
provisions in Paragraph 1) of this Article regarding the Buyer's rescission
of
the Contract shall be applied.
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4)
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CAR
CAPACITY
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If
the
car capacity of the Vessel, as determined in accordance with the Specifications,
is below the guaranteed car capacity of the Vessel, the Contract Price of the
Vessel shall be reduced by ****** as liquidated damages for the deficiency
of
each car unit.
If
the
deficiency in the car capacity exceeds one hundred (100) units below the
guaranteed car capacity, the Buyer at its option may accept the Vessel at a
reduction in the Contract Price
11
of
******, or subject to the provisions of Paragraph 4) of Article VIT, may reject
the Vessel and rescind this Contract, in which case the provisions in Paragraph
I) of this Article regarding the Buyer's rescission of the Contract shall be
applied.
12
ARTICLE
IV
-
SUPERVISION AND INSPECTION
1)
SUPERVISION BY SELLER:
Scope
of
Works : The Seller shall carry out the supervision on the construction of the
Vessel by the Builder, including, without limitation, (i) approval of the plans
and drawings, (ii) inspections on the Vessel, its machinery, equipment and
outfitting, (iii) attendance of trials and tests and (iv) making comments as
to
conformity with the Specifications.
Seller's
Appointment: The Seller appoints ****** or similar quality entities as
supervising company.
Seller's
Technical Decision: Any decision regarding the approval of plans and drawings,
supervision of construction and acceptance of the Vessel under the Shipbuilding
Contract between the Seller and the Builder dated 25th July, 2007
shall
be made by the Seller in its absolute discretion and that such decision shall
not require any prior consultation with or approval of the Buyer or its
representatives. During the construction of the Vessel, the Seller shall give
to
the Buyer, upon their request, an technical information which they are holding,
and shall make best endeavors to obtain information and documents which the
Buyer might need. The Seller shall undertake that the supervision of
construction of the Vessel shall be carried out as if the Vessel was for their
internal account and management.
2)
NO
SUPERVISION BY BUYER:
The
Buyer
shall not have the right of supervision but shall have the right to send its
representatives in the capacity of observers pursuant to Clause 3)
hereof.
3)
BUYER'S OBSERVANCE:
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Buyer's
Observance: The Buyer may send one (1) observer to the Shipyard
periodically as follows to review progress of construction of the
Vessel
at the Buyer's risk and expenses
without
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13
interfering
with the construction of the Vessel.:
(a)At
the time of keel-laying of the
Vessel.
(b)At
the time of launching of the
Vessel.
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(c)
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At
the time of significant test/trials for main engine during shipbuilding
period of the Vessel
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(d)
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At
the time of significant test/trials for diesel generator sets during
shipbuilding period of the Vessel.
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(e)
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Maximum
duration per one observation mentioned above shall be four (4) calendar
days.
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(f)
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At
any time during the entire duration of Sea Trials in which case the
Buyer's observer as well as three (3) Buyer's crew including Master
and/or
Chief Engineer and/or (I) Technical Manager to be joined by the Buyer's
observer. Such Buyer's crew shall be permitted to be in attendance
on the
Vessel at the sea trial of the Vessel at Buyer's risk and expenses
and for
familiarization purpose only.
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(g)
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The
Buyer' Observer shall not attend and not be stationed at the Shipyard
and/or any other Builder's shipyard without the attendance of the
Seller's
supervisor.
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(h)
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At
any other time requested by Buyer but maximum three (3) times and
subject
to Seller's approval and
acceptance.
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Seller's
Liability: The Seller shall be under no liabilities in respect of any loss,
damage or injury suffered by such representatives, and the Buyer shall indemnify
the Seller against any loss, damage or liability sustained or incurred by the
Seller howsoever caused as a consequence of or arising out of or in connection
with the attendance of such representatives on board the Vessel during its
acceptance trials.
Restriction
on Observance: The representatives referred to in this Clause shall not
interfere with or obstruct in any way the Seller's supervision on board the
Vessel during its acceptance sea trials and/or sea trials schedule of the
Builder.
Buyer's
Comment: The Buyer's comment(s), if any, during sea trials of the Vessel
shall not be unreasonably withheld by the Seller and the Seller shall take
action if necessary, provided that such comment( s) shall not affect the price,
cost of the Vessel and the sea trials schedule of the Builder.
14
ARTICLE V
- MODIFICATIONS, CHANGES AND SUBSTITUTION
1)
VOLUNTARY MODIFICATIONS BY MUTUAL AGREEMENT
The
Specifications may be modified and/or changed by written agreement of the
parties hereto, provided that such modifications and/or changes or an
accumulation thereof will not, in the Seller's judgment, adversely affect
Builder's planning or program in relation to the Seller's other commitments,
and
provided, further, that the Buyer shall first agree, before such modifications
and/or changes are carried out, to alterations in the Purchase Price, the
Delivery Date and other terms and conditions of this Contract and Specifications
occasioned by or resulting from such modifications and/or changes. Such
agreement may be effected by exchange of letters signed by the authorized
representatives of the parties hereto or by email or facsimile confirmed by
such
letters manifesting agreements of the parties hereto which shall constitute
amendments to this Contract and/or the Specifications.
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2)
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COMPULSORY
MODIFICATION
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(I)
Change in Class: In the event that, after the date of this
Contract, any requirements as to class, or as to rules and regulations
to
which the construction of the Vessel is required to conform are altered
or
changed by the Classification Society or the other regulatory bodies
authorized to make such alterations or changes, the following provisions
shall apply:
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(a)
If such alterations or changes are compulsory for the Vessel, either
of
the parties hereto, upon receipt of such information from the
Classification Society or such other regulatory bodies, shall promptly
transmit the same to the other in writing, and the Seller shall thereupon
cause the Builder to incorporate such alterations or changes into
the
construction of the Vessel, provided that the Buyer shall first agree
to
adjustments required by the Seller in the Purchase Price, the Delivery
Date and other terms and conditions of this Contract and the
Specifications occasioned by or resulting from such alterations or
change.
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(b)
If
such alterations or changes are not compulsory for the Vessel, but the Buyer
15
desires
to incorporate such alterations or changes into the construction of the Vessel,
then, the Buyer shall notify the Seller of such intentions. The Seller may
accept such alterations or changes if they will not, in the judgment of the
Seller, adversely affect the Builder's planning or program in relation to the
Seller's other commitments, and provided, further, that the Buyer shall first
agree to adjustments required by the Seller in the Purchase Price, the Delivery
Date and other terms and conditions of this Contract and the Specifications
occasioned by or resulting from such alterations or changes.
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(2)
Change in Class: Agreement as to such alterations or changes under
(1) above shall be made in the same manner as provided in Sub-Clause
VI)
here offor modifications or changes to the
Specifications.
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3)
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SUBSTITUTION
OF MATERIALS
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In
the
event that any of the materials required in the construction of the Vessel
under
this Contract and the Specifications and Plans cannot be procured in time to
effect delivery, or are in short supply to maintain the Delivery Date of the
Vessel, the Seller may, provided that the Seller shall so notify the Buyer,
cause the Builder to supply other available materials which are capable of
meeting the requirements of class and of the rules and regulations with which
the construction of the Vessel must comply. Any agreement as to the substitution
of materials may be effected in the manner provided in Sub-Clause VI)
of this Article, and shall likewise, include reasonable alterations
in the Contract Price and other terms and conditions of this Contract, if any,
occasioned by or resulting from the substitution.
16
ARTICLE VI
- BUYER'S SUPPLIES
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1)
|
RESPONSIBILITY
OF THE BUYER
|
The
Buyer
shall, at its cost and expense, supply all articles to be supplied by the Buyer,
as specifically listed in the Specifications (hereinafter referred to as the
"Buyer's Supplies"), to the Seller at the Shipyard in perfect condition ready
for installation and by the date designated by the Seller and/or the Builder
to
meet the building schedule of the Vessel.
In
order
to facilitate the installation of the Buyer's Supplies by the Builder, the
Buyer
shall furnish the Seller with the necessary plans, instruction books, test
reports and certificates required by rules or regulations, and if so requested
by the Seller and/or the Builder, shall cause the representative(s) of the
manufacturers of these articles to assist the Builder in installation and/or
make necessary adjustment thereof at the Shipyard, for the Buyer's
account.
The
Buyer
shall be liable for any expenses incurred by the Seller and/or the Builder
for
repair of the Buyer's Supplies due to defective material or poor workmanship
or
performance or due to damage under transportation.
Should
the Buyer fail to deliver to the Seller any item of the Buyer's Supplies
including the necessary plans, instruction books, test reports and certificates
mentioned above by the time designated by the Seller and/or the Builder, the
delivery of the Vessel shall automatically be extended for a period of such
delay, provided such delay in delivery shall affect delivery of the Vessel.
In
such event the Buyer shall pay to the Seller all losses and damages (except
for
the consequential loss or damage) sustained by the Seller and/or the Builder
due
to such delay in delivery of the Buyer's Supplies, and such payment shall be
made upon delivery of the Vessel. In case that the delay in delivery of such
Buyer's Supplies should exceed thirty (30) days beyond the date specified for
delivery thereof, the Seller shall be entitled to cause the Builder to proceed
with construction of the Vessel without installation of such item(s) in or
onto
the Vessel, without prejudice to the Seller's right hereinabove provided, and
the Buyer shall accept the Vessel so completed.
17
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2)
|
RESPONSIBILITY
OF THE BUILDER
|
The
Buyer
and the Seller hereby confirm that the Builder shall be responsible for storing
and handling of the Buyer's Supplies after delivery to the Shipyard, and shall
install them on board the Vessel at the Builder's expense; it being agreed,
however, the Seller and the Builder are not responsible for quality, performance
and/or efficiency of any equipment of the Buyer's Supplies and is under no
obligation with respect to guarantee of such equipment against any defects
caused by poor quality, performance and/or efficiency of the Buyer's Supplies
themselves.
This
provision does not apply to, and the Seller and the Builder shall not be
responsible for, the items such as ship stores which the Seller and the Builder
are not required to install on board the Vessel under the
Specifications.
18
ARTICLE
VII -
TRIALS
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I)
|
NOTICE
|
The
Seller shall notify the Buyer, at least fourteen (14) days in advance, of the
time and place of the trial of the Vessel, and the Buyer shall promptly
acknowledge receipt of such notice. Buyer's observance of the sea trials of
the
Vessel shall be carried out pursuant to Aritic1e N. 3) hereof. Failure
in attendance of the observer at the trial run of the Vessel for any reason
whatsoever after due notice to the Buyer as above provided shall be deemed
to be
a waiver by the Buyer of its right to have the Buyer's observer on board the
Vessel at the trial run.
2) WEATHER
CONDITIONS
The
trial
shall be carried out under the weather condition which is deemed favorable
enough by the judgment of the Seller. In the event of unfavorable weather on
the
date specified for the trial, same shall take place on the first available
day
thereafter that the weather conditions permit. The parties hereto recognize
that
the weather conditions in Japanese waters in which the trial runs are to take
place are such that great changes in weather may arise momentarily and without
warning, and therefore, it is agreed that, if, during the trial run, such change
in the weather should occur as precludes the continuance of the trial, the
trial
run shall be discontinued and postponed until the first day next following
which
is deemed favorable enough by the judgment of the Seller; unless the Buyer
shall
assent to acceptance of the Vessel on the basis of trials made prior to such
change in weather conditions. Any delay of the trial run caused by such
unfavorable weather conditions shall operate to extend the date for delivery
of
the Vessel by the period of delay involved, and such delay shall be deemed
as
permissible delay in the delivery of the Vessel.
3) HOW
CONDUCTED
19
All
expenses in connection with the trial of the Vessel are to be for the account
of
the Seller, and the Seller shall cause the Builder to provide at its own expense
the necessary materials and the necessary crew to comply with conditions of
safe
navigation. The trial shall be conducted in the manner prescribed in the
Specifications, and shall prove fulfillment of the performance requirements
for
the trials as set forth in the Specifications. All trials of the Vessel shall
be
conducted on the trial course determined by the Seller.
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4)
|
METHOD
OF ACCEPTANCE OR REJECTION
|
Upon
completion of the trial run, the Builder shall give the Seller a notice by
email
or facsimile confirmed in writing of completion of the trial run, as and if
the
Builder considers that the results of the trial run indicate conformity of
the
Vessel to this Contract and the Specifications. The Seller shall, within three
(3) Business Days after receipt of such notice from the Builder, notify the
Builder by email or facsimile confirmed in writing of its acceptance or
rejection of the Vessel. Such acceptance of the Vessel shall be made provided
that the Vessel is deemed to satisfy the requirements of this Contract and
the
Specifications. The Buyer shall be deemed to have accepted the Seller's such
decision.
However,
should the result of the trial run indicate that the Vessel or any part or
equipment thereof does not conform to the requirements of this Contract and/or
the Specifications, and if the Builder is in agreement to non-conformity as
specified in the Seller's notice of rejection to the Builder, then the Seller
shall cause the Builder to correct such non-conformity and perform such further
test as may be deemed necessary until the Builder are able to prove satisfaction
of the same with requirements of this Contract and/or the
Specifications.
The
Buyer
shall follow the decision of the Seller, and shall give notice of acceptance
to
the Seller as long as the Seller make a decision of acceptance of the Vessel,
except in the case that the Buyer proves to the Seller's satisfaction that
the
Vessel is not materially and substantially in conformity with the Specifications
with evidences, in which case the Seller shall review the opinion and evidences
submitted by the Buyer and discuss in good faith. Except where the Seller
reasonably judges that the Buyer's opinion of substantial non-
20
conformity
is obviously wrong or abuse of the right, then a matter shall first referred
to
judgment of the Classification Society, but if the Classification Society fails
to make a judgment or cannot do so, the matter shall be referred to an
arbitration.
|
5)
|
EFFECT
OF ACCEPTANCE
|
Acceptance
of the Vessel as above provided shall be final and binding so far as conformity
of the Vessel to this Contract and the Specifications is concerned and shall
preclude the Buyer from refusing formal delivery of the Vessel as hereinafter
provided, if the Seller complies with all other procedural requirements for
delivery as provided for in Article VlII hereof. The Seller will exercise good
faith in determining acceptance or rejection of the Vessel.
|
6)
|
DISPOSITION
OF SURPLUS CONSUMABLE STORES
|
Should
any fuel oil, fresh water (except fresh water used as ballast) and other
consumable stores, furnished by the Seller for trial runs remain on board the
Vessel after acceptance of the Vessel by the Buyer, the Buyer agrees to buy
the
same from the Seller at the price the Seller paid to the local supplier through
the Builder evidenced by voucher, and payment shall be effected at the time
of
delivery of the Vessel.
Lubricating
oils and greases necessary for the operation of the Vessel shall be supplied
by
the Buyer prior to the trial runs, and the Seller shall pay upon delivery of
the
Vessel the cost of the quantities of lubricating oils and greases consumed
during the trial runs at original purchase price by the Buyer evidenced by
voucher.
21
ARTICLE
VIII -
DELIVERY
|
1)
|
TIME
AND PLACE
|
The
Vessel shall be delivered by the Seller to the Buyer at the Shipyard, not
earlier than ******, but not later than ******, subject, however, to the
provisions relating to permissible delays, and extension of the time of delivery
of the Vessel under this Contract.
It
is
understood and agreed by both parties hereto that the Seller shall use due
diligence to cause the Builder to construct, complete and deliver the Vessel
at
the earliest possible time and the Buyer shall promptly accept the Vessel if
and
when the Seller shall tender earlier delivery of the Vessel, provided that
the
Seller shall have performed all its obligations under this
Contract.
|
2)
|
WHEN
AND HOW EFFECTED
|
Provided
that the Buyer shall concurrently pay to the Seller all sums due and payable
upon delivery of the Vessel, the delivery of the Vessel shall be forthwith
effected upon acceptance thereof by the Buyer, as herein provided, by the
concurrent delivery by each of the parties hereto to the other of a PROTOCOL
OF
DELIVERY AND ACCEPTANCE acknowledging delivery of the Vessel by the Seller
and
acceptance thereof by the Buyer, which PROTOCOL shall be prepared in duplicate
and executed by each of the parties hereto.
|
3)
|
DOCUMENTS
TO BE DELIVERED TO THE BUYER
|
Acceptance
of the Vessel by the Buyer shall be conditioned upon receipt by the Buyer of
the
following duly authenticated documents to be provided by the Seller and/or
the
Builder, which shall accompany the aforementioned PROTOCOL OF DELIVERY AND
ACCEPTANCE:
(a)
COMMERCIAL INVOICE.
22
|
|
(b)
|
DECLARATION
OF WARRANTY of the Seller that the Vessel is delivered to the Buyer
free
and clear of any and all liens, claims or other encumbrances upon
the
Vessel and Buyer's title thereof, and in particular, that the Vessel
is
absolutely free of all burdens in the nature of imposts, taxes or
charges
imposed by the city, state or country of the port of delivery, as
well as
of all liabilities arising from the construction or operation of
the
Vessel in trial runs or otherwise, prior to delivery and
acceptance.
|
(c) PROTOCOL
OF TRIALS of the VESSEL made pursuant to the Specifications.
|
|
(d)
|
PROTOCOL
OF INVENTORY of the equipment of the VESSEL, including spare parts
and the
like, all as specified in the
specifications.
|
|
|
(e)
|
PROTOCOL
OF STORES OF CONSUMABLE NATURE referred to under paragraph 6) of
Article
VII hereof, including the original purchase price thereof. (f)
FINISHED DRAWINGS AND PLANS and instruction books pertaining
to the
Vessel as stipulated in the
Specifications.
|
|
|
(f)
|
FINISHED
DRAWINGS AND PLANS and instruction books pertaining to the Vessel
as
stipulated in the Specifications.
|
(g) XXXX
OF SALE (being Notarized & Legalized
or Apostil led)
|
|
(h)
|
BUILDER'S
CERTIFICATE (being Notarized &
Legalized or Apostil 1 ed) and all other CERTIFICATE(S) required
to
be furnished upon delivery of the Vessel pursuant to the
Specifications.
|
|
4)
|
TITLE
AND RISK
|
Title
to
and risk of the Vessel shall pass to the Buyer upon acceptance thereof by the
Buyer as stated above; it being expressly understood that, until such acceptance
is effected, the Vessel and its equipment are at the title and risk of the
Seller.
|
5)
|
REMOVAL
OF THE VESSEL
|
The
Buyer
shall take possession of the Vessel immediately upon acceptance thereof, and
if
so requested by the Seller, shall remove the Vessel from the Shipyard within
three (3) days after acceptance of the Vessel.
23
ARTICLE
IX
-
FORCE MAJEURE
|
1)
|
CAUSES
OF DELAY
|
If,
at
any time before the actual delivery, either the construction of the Vessel
or
any performance required as a prerequisite of delivery of the Vessel is delayed
due to Acts of God; acts of princes or rulers; requirements of government
authorities; war or other hostilities or preparations there for; blockade;
revolution, insurrections, mobilization, civil war, civil commotion or riots;
vandalism; sabotages, strikes, lockouts or other labor disturbances; labor
shortage, plague or other epidemics; quarantine; flood, typhoons, hurricanes,
storms or other weather conditions not included in normal planning; earthquakes;
tidal waves; landslides; fires, explosions, collisions or strandings; embargoes;
delays or failure in transportation; shortage of materials, machinery or
equipment; import restrictions; inability to obtain delivery or delays in
delivery of materials, machinery or equipment, provided that at the time of
ordering the same could reasonably be expected by the Seller and/or the Builder
to be delivered in time; prolonged failure, shortage or restriction of electric
current, oil or gas; defects in materials, machinery or equipment which could
not have been detected by the Seller and/or the Builder using reasonable care;
casting or forging rejects or the like not due to negligence; delays caused
by
the Classification Society or other bodies whose documents are required;
destruction of or damage to the Shipyard or works of the Builder, its
subcontractors or suppliers, or of or to the Vessel or any part thereof, by
any
causes herein described; delays in the Builder's other commitments resulting
from any causes herein described which in turn delay the construction of the
Vessel or the Seller's and/or the Builder's performance under this Contract;
other causes or accidents beyond control of the Seller and/or the Builder,
its
subcontractors or suppliers of the nature whether or not indicated by the
foregoing words; all the foregoing provided that these events could not be
foreseen at the day of signing this Contract; then and in any such case, the
delivery date shall be postponed for a period of time which shall not exceed
the
total accumulated time of all such delays.
24
|
2)
|
NOTICE
OF DELAY
|
Within
twelve (12) days after the date of occurrence of any cause of delay, on account
of which the Seller claims that it is entitled under this Contract to a
postponement of the delivery date, the Seller shall notify the Buyer in writing
or by email or facsimile confirmed in writing of the date such cause of delay
occurred. Likewise, within twelve (12) days after the date of ending of such
cause of delay, the Seller shall notify the Buyer in writing or by facsimile
confirmed in writing of the date such cause of delay ended. The Seller shall
also notify the Buyer of the period by which the delivery date is postponed
by
reason of such cause of delay, with all reasonable dispatch after it has been
determined. Failure of the Buyer to object to the Seller's claim for
postponement of the delivery date within five (5) days after receipt by the
Buyer of such notice of claim shall be deemed to be a waiver by the Buyer of
its
right to object to such postponement of the delivery date.
|
3)
|
DEFINITION
OF PERMISSIBLE DELAY
|
Delays
on
account of such causes as specified in Paragraph I) of this Article and any
other delays of a nature which under the terms of this Contract permits
postponement of the delivery date shall be understood to be permissible delays
and are to be distinguished from unauthorized delays on account of which the
Contract Price is subject to adjustment as provided for in Article III
hereof.
|
4)
|
RIGHT
TO RESCIND FOR EXCESSIVE DELAY
|
If
the
total accumulated time of all delays on account of the causes specified in
Paragraph 1) of this Article, excluding delays of a nature which under the
terms
of this Contract permit postponement of the delivery date, amounts to one
hundred and fifty (150) days or more, then in such event, the Buyer may rescind
this Contract by serving upon the Seller a written notice of cancellation.
Such
cancellation shall be effective as of the date the first arriving notice thereof
is received by the Seller, and the Seller, after receipt of such notice, shall
refund to the Buyer the full amount of all sums paid to the Seller on account
of
25
the
Vessel. Such refund shall forthwith discharge all obligations, duties and
liabilities of each of the parties hereto to the other under this Contract.
The
Seller may, at any time, after the aggregate of the aforementioned delays shall
exceed one hundred and fifty (150) days, as aforesaid, demand in writing that
the Buyer shall make an election, in which case the Buyer shall, within ten
(10)
days after such demand is received, either notify the Seller of its intention
to
rescind, or agree to an extension of the time for delivery to a future date
specified by the Seller.
It
being
understood and agreed by the parties that if further delay occurs on account
of
the causes specified in this Article beyond such extended delivery date, the
Buyer immediately shall again have the same right of rescission.
26
ARTICLE X
- WARRANTY OF OUALITY
1) GUARANTEE
OF MATERIALS AND WORKMANSHIP
The
Seller shall cause the Builder, for the period of twelve (12) months from the
date of delivery of the Vessel, to guarantee the Vessel, her hull, her engines,
her machineries, outfittings and accessories and all parts and equipments,
excluding Buyer's Supplies stipulated in Article VI hereof, against all defects
which are due to defective material and/or poor workmanship of the Builder
and/or its subcontractors and are neither the result of incompetence,
mismanagement, negligence, accident or willful neglect of the Buyer, its
employees or agents or of any persons other than employees or agents of the
Seller and/or the Builder, nor the effect of perils of the seas or river or
normal wear and tear. The Seller and/or the Builder shall have no obligation
under this guarantee for any defects discovered prior to the expiry date of
the
guarantee unless notice of such defects is received by the Seller not later
than
thirty (30) days after such expiry date.
However,
in case that the Buyer is unable to enter the Vessel in the dry-dock within
the
guarantee period as provided above, the Builder's guarantee for the underwater
part of the Vessel which cannot be discovered unless the Vessel is dry-docked,
may be extended until the time of the first dry-docking after the delivery
of
the Vessel, subject to the mutual agreement of the parties hereto.
|
2)
|
NOTICE
OF DEFECTS:
|
The
Buyer
shall notify the Seller in writing, or by email or facsile confirmed in
writing,
of
any
defects for which claim is made under this guarantee as promptly as possible
after discovery thereof. The Buyer's written notice shall describe the nature
and extent of the defects.
3) EXTENT
OF THE SELLER'S AND THE BUILDER'S LIABILITY
27
The
Seller and/or the Builder shall be under no obligation with respect to defects
discovered after the expiration of the period of guarantee specified above.
The
Seller and/or the Builder shall not be responsible for any consequential damages
occasioned by any defects or for any loss of time in operating or repairing
the
Vessel, or both, caused by any defects. Nor shall there be any liability of
the
Seller and/or the Builder hereunder for defects in the Vessel or any part or
equipment thereof, caused by fire or accident at sea or elsewhere or by
mismanagement, accidents, negligence or willful neglect on the part of the
Buyer, its employees or agents, or of any persons other than employees or agents
of the Seller and/or the Builder. Likewise, the Seller and/or the Builder shall
not be liable for defects in the Vessel, or any part or equipment thereof,
that
are due to repairs which were made by other than the Builder at the direction
of
the Buyer, as hereinafter provided.
The
provisions of this Article X exclude and negate any other or further
responsibility or liability imposed on the Seller and/or the Builder by statute
or otherwise.
|
4)
|
REMEDY
OF DEFECTS
|
The
Seller shall cause the Builder to remedy any defects against which the Vessel,
or any part or equipment thereof is guaranteed under this Article, by repairing
or replacing the defective parts at the Builder's shipyard, unless the Vessel
can not be conveniently brought to such shipyard for such repairs.
In
case
the Vessel can not be conveniently brought to the shipyard of the Builder,
the
Buyer may cause necessary repairs or replacements to be made elsewhere at the
direction of the Buyer. In such case the Buyer shall first give the Seller
the
notice thereof, and the Seller shall have the right to verify by its own or
the
Builder's representative the nature and extent of the defects complained of,
and
shall, after such verification, promptly advise the Buyer of its acceptance
or
rejection of the defects as one/those that is/are subject to the guarantee
herein provided. Any dispute shall be referred to arbitration in accordance
with
the provisions of Article XIII hereof. If the Seller accepts the defects as
one/those justifying remedy under this Article, the Seller shall pay to the
Buyer, unless otherwise agreed upon between the parties hereto, actual cost
incurred for such repairs and replacements.
28
Upon
reasonable requests from the Buyer, duly endorsed by the Builder's engineer
ifhe
is then on board, the Seller shall cause the Builder to forward to the Vessel
necessary parts and/or equipment, by sea freight at Seller's expense, to replace
those which have been found defective in accordance with provisions hereof.
If
the Buyer should reasonably require same to be forwarded by air freight, the
Seller shall do so at Seller's expense, provided that, such parts and/or
equipment are essential to and urgently required for the seaworthiness of the
Vessel.
The
guarantee contained in this Article shall not be assigned to any party in any
case including but not limited to the case that the Vessel is sold by the Buyer
to the third party, unless prior consent of the Seller is given in
writing.
29
ARTICLE
XI
-
INSURANCE
|
1)
|
EXTENT
OF INSURANCE COVERAGE
|
The
Seller shall cause the Builder, at the Builder's own cost and expense, to insure
the Vessel and all machinery, equipment, appurtenances and outfits, including
the Buyer's Supplies, built into or installed in or upon the Vessel, with first
class insurance company or underwriters in Japan. The amount of such insurance
coverage shall not be less than the aggregate amount of all installments paid
by
the Buyer to the Seller, plus the value of the Buyer's Supplies in the custody
of the Shipyard.
|
2)
|
APPLICATION
OF RECOVERED AMOUNTS
|
In
the
event that the Vessel
shall be damaged from any insured cause at any time before delivery of the
Vessel, and in the further event that such damage shall not constitute an actual
or a constructive total loss of the Vessel, the amount received in respect
of
the insurance shall be applied by the Builder in repair of such damage,
satisfactory to the Classification requirements, and the Buyer shall accept
the
Vessel under this Contract if completed in accordance with this Contract and
the
Specifications, subject, however, to the extension of delivery time under
Article VIII hereof.
Should
the Vessel from any cause become an actual or constructive total loss, the
Seller shall either:
|
|
(
a)
|
cause
the Builder to proceed in accordance with the terms of this Contract,
in
which case the amount received in respect of the insurance shall
be
applied to the reconstruction and repair of the damage of the Vessel,
provided the parties hereto shall have first agreed thereto in writing
and
to such reasonable extension of delivery time as may be necessary
for the
completion of such reconstruction and repair, delays due to such
extension
being deemed to be permissible delays;
or
|
30
|
|
(b)
|
Refund
promptly to the Buyer the full amount of all sums paid by the Buyer
to the
Seller as installments in advance of delivery of the Vessel and deliver
to
the Buyer all Buyer's Supplies (or the insurance proceeds paid with
respect thereto), in which case this Contract shall be deemed to
be
automatically terminated and all rights, duties, liabilities and
obligations of each of the parties to the other shall forthwith cease
and
terminate.
|
3) TERMINATION
OF SELLER'S AND/OR BUILDER'S OBLIGATION TO INSURE
The
Seller and/or the Builder shall be under no obligation to insure the Vessel
hereunder after delivery of the Vessel to the Buyer.
31
ARTICLE XII
- BUYER'S DEFAULT
|
1)
|
DEFINITION
OF DEFAULT
|
The
Buyer
shall be deemed to be in default of performance of its obligations under this
Contract in the following cases:
|
(a)
|
If
the Buyer fails to pay the 1st Installment to the Seller within three
(3)
Business Days after the day and year first above written under the
provisions of Article II hereof; or
|
|
(b)
|
If
the Buyer fails to pay the 2nd and 3rd Installments to the Seller
within
three (3) Business Days after such Installment becomes due and payable
under the provisions of Article II hereof;
or
|
|
(c)
|
If
the Buyer fails to pay the 4th Installment to the Seller concurrently
with
the delivery of the Vessel by the Seller to the Buyer as provided
in
Article II hereof; or (d) If the Buyer fails to take delivery of
the
Vessel, when the Vessel is duly tendered for delivery by the Seller
under
the provisions of Article VIII hereof;
or
|
|
(
e)
|
If
the Buyer cancels or terminates or purports to cancel or terminate
or
issues a notice of cancellation or termination in respect of this
Contract
(save and except as the result of the proper exercise of its rights
under
this Contract); or
|
|
(f)
|
If
any court order or other order having a legally binding effect on
the
Buyer is requesting the Buyer to cease purchase of the Vessel;
or
|
|
(g)
|
If,
after the date of this Contract, a petition is filed or an order
is made
or and effective resolution is passed for the winding up of the Buyer;
or
|
|
(h)
|
If
the Buyer ceases to carry on its business or declares its intention
to
cease to carry on its business or generally is subjected to any applicable
insolvency procedure; or (i) If a receiver, trustee, liquidator or
sequestrator of, or for, the Buyer or any substantial part of their
property is appointed.
|
|
(i)
|
If
a receiver, trustee, liquidator or sequestrator of, or for, the Buyer
or
any substantial part of their property is
appointed.
|
32
|
2)
|
INTEREST
CHARGE
|
If
the
Buyer is in default of payment as to any installment mentioned above, the Buyer
shall, commencing with and including the due date, pay interest on such unpaid
installment at the rate of two point five percent (2.5%) over the Long-term
prime rate in Japan per annum until such installment including interest thereon
is fully paid.
It
is
expressly understood that the rate of interest specified in this Contract shall
be the net rate to be received by the party entitled thereto.
|
3)
|
RESCISSION
BY SELLER
|
If
such
default continues for a period of ten (10) days thereafter, the Seller may,
at
its option, rescind this Contract by giving notice to the Buyer by email or
facsimile confirmed in writing. Upon receipt of such notice of rescission by
the
Buyer, this Contract shall forthwith be rescinded and cancelled, and any lien,
interest or property right that the Buyer may have in and to the Vessel or
to
any part or equipment thereof and to any material or part acquired for
construction of the Vessel but not yet utilized for such purpose, shall
forthwith cease, and the Vessel and all parts and equipment thereof shall become
the sole property of the Seller, and any installment or installments theretofore
paid by the Buyer to the Seller on account of this Contract shall be retained
by
the Seller, however, the retainment of installments shall not preclude the
Seller from claiming proven loss or damages (except for the consequential loss
or damages), if any, which are suffered by the Seller consequent on rescission
of this Contract.
|
4)
|
SALE
OF VESSEL
|
In
the
event of rescission of this Contract as provided above, the Seller shall have
full right and power either to complete or not to complete the Vessel as it
deems fit, and to sell the Vessel at a public or private sale on such terms
and
conditions as the Seller thinks fit without being answerable for any loss or
damage. When the sale of the Vessel is made, the proceeds shall be received
by
the Seller and shall be applied by the Seller as follows:
33
(a)
In
case of sale of the Vessel in incomplete state:
Firstly
to payment of (1) all costs and expenses attending the sale and otherwise
incurred by the Seller and the Builder as a result of the Buyer's default and
then to (2) compensation to the Seller and the Builder for all costs and
expenses relating to the construction of the Vessel and interest thereon at
the
rate of two point five percent (2.5%) over the Long-term prime rate in Japan
per
annum and for reasonable loss of profit consequent on the rescission of this
Contract.
If
the
proceeds of sale plus the installment or installments paid by the Buyer is
sufficient to pay all of the above (1) and (2), the balance shall be paid to
the
Buyer, however, if the proceeds of sale is deficient to pay the same, such
deficiency shall forthwith be paid by the Buyer upon demand of the
Seller.
(b)
In
case of sale of the Vessel after completion:
Firstly
to payment of (1) all costs and expenses attending the sale and otherwise
incurred by the Seller and/or the Builder as a result of the Buyer's default
and
then to (2) all unpaid installments of the Contract Price and interest of such
installments at the rate of two point five percent (2.5%) over the Long-term
prime rate in Japan per annum from the respective due dates thereof to the
date
of application.
If
there
is any balance left of the proceeds of sale after full payment of all above
(1)
and (2), the balance shall be paid to the Buyer, however, if the proceeds of
sale are deficient to pay all of the above (I) and (2), such deficiency shall
forthwith be paid by the Buyer upon demand of the Seller.
34
ARTICLE
XIII - SELLER'S DEFAULT
|
I)
|
DEFINITION
OF DEFAULT
|
The
Seller shall be deemed to be in default of performance of its obligations under
this Contract in the following cases:
|
(a)
|
If
the Seller cancels or terminates or purports to cancel or terminate
or
issues a notice of cancellation or termination in respect of this
Contract
(save and except as the result of the proper exercise of its rights
under
this Contract); or
|
|
(b)
|
If
any court order or other order having a legally binding effect on
the
Seller is requesting the Seller to cease sale of the Vessel;
or
|
|
(
c)
|
If,
after the date of this Contract, a petition is filed or an order
is made
or and effective resolution is passed for the winding up of the Seller;
or
|
|
(d)
|
If
the Seller ceases to carry on its business or declares its intention
to
cease to carry on its business or generally is subjected to any applicable
insolvency procedure; or ( e) If a receiver, trustee, liquidator
or
sequestrator of, or for, the Seller or any substantial part of their
property is appointed.
|
2) RESCISSION
BY
BUYER
The
payments made by the Buyer prior to the delivery of the Vessel shall be in
the
nature of advances to the Seller. If such default continues for a period of
ten
(10) days thereafter. the Buyer may, at its option, rescind this Contract by
giving notice to the Seller by email or facsimile confirmed in writing. Upon
receipt of such notice of rescission by the Seller, this Contract shall
forthwith be rescinded and cancelled.
35
3)
REFUND BY SELLER
Thereupon
the Seller shall promptly refund to the Buyer the full amount
of
all sums paid by the Buyer to the Seller on account of the Vessel, unless the
Seller proceeds to the arbitration under the provisions of Article XIV
hereof.
In
such event, the Seller shall pay to the Buyers interest at the rate of two
point
five percent (2.5%)
per
annum on the amount required to be refunded to the Buyer,
computed from the respective dates on which such sums were paid by the Buyer
to
the Seller to the date of remittance by the Seller.
4).
DISCHARGE OF OBLIGATIONS:
Upon
such
refund by the Seller to the Buyer, all obligations, duties and liabilities
of
each of the parties hereto to the other under this Contract shall be forthwith
completely discharged.
ARTICLE
XIV - ARBITRATION
1) TECHNICAL
DISPUTES
Any
dispute or any difference of opinion between the parties hereto relating to
conformity of the construction of the Vessel or material used to the
Classification requirements or relating to any other technical matters shall
be
referred to the Classification Society for settlement by and between the parties
and the Classification Society.
In
the
event that the settlement cannot be reached by the three parties
above-mentioned, then such matter shall be referred to arbitration as
hereinafter provided.
36
|
2)
|
ARBITRATION
|
Except
for the case in which the dispute is settled under Paragraph I) hereof, any
dispute arising under or by virtue of this Contract or any difference of opinion
between the parties hereto concerning their rights and obligations under this
Contract, shall be referred to arbitration in Tokyo in accordance with the
prevailing rules and regulations of Japan Shipping Exchange, Inc.
|
3)
|
ALTERATION
OF DELIVERY TIME
|
In
the
event of arbitration of any dispute arising or occurring prior to delivery
of
the Vessel, an award of the arbitrators shall include a finding as to whether
or
not the delivery date of the Vessel is in any way altered thereby.
37
ARTICLE XV-
ASSIGNMENT
OF CONTRACT
Neither
party may assign this Contract in whole or in part to any other individual
or
company unless the prior consent of the other party is given in written
agreement.
In
case
of assignment by the Buyer, such assignment shall further be subject to approval
of the Japanese Government, and the Buyer shall remain liable under this
Contract.
This
Contract shall inure to the benefit of and shall be binding upon the lawful
successors or the legitimate assigns of either or both parties.
38
ARTICLE XVI
- TAXES AND DUTIES
|
1)
|
TAXES
|
All
taxes
and charges of any kind incurred in connection with this Contract in Japan
except stamp duty in Japan which shall be shared by both parties, shall be
borne
by the Seller, and those incurred in countries other than Japan shall be borne
by the Buyer.
|
2)
|
DUTIES
|
The
Seller shall hold the Buyer harmless from any payment of a duty imposed in
Japan
upon materials or supplies which the Seller may acquire at its cost and by
its
own discretion from abroad for construction of the Vessel. However, the import
duties, if any, on any materials or apparatus which, under the terms of this
Contract and/or Specifications, may be supplied by the Buyer from abroad for
construction of the Vessel, and or any other materials, stores, provisions
or
any other goods which the Buyer or its employees may take in from abroad shall
be borne by the Buyer.
39
ARTICLE XVII
- PATENTS, TRADE MARKS, COPYRIGHTS
|
1)
|
PATENTS,
TRADEMARKS AND COPYRIGHTS
|
Machinery
and equipment of the Vessel may bear the patent numbers, trade marks or trade
names of the manufacturers, Nothing contained herein shall be construed as
transferring any patent or trade xxxx rights or copyrights in equipment covered
by this Contract, and all such rights are hereby expressly reserved to the
true
and lawful owners thereof.
The
Seller shall cause the Builder to defend the Buyer and hold it harmless from
patent liability or claim of patent infringement of any nature or kind,
including costs and expenses for, or on account of, any patented or unpatented
invention made or used in the performance of the Contract and also including
costs and expenses of litigation, if any, provided, however, that the Buyer
shall defend the Seller and hold it harmless in respect of infringement of
any
patent rights on account of parts or equipment for the Vessel supplied by the
Buyer.
|
2)
|
GENERAL
PLANS, SPECIFICATIONS AND WORKING
DRAWINGS
|
The
Buyer
hereby agrees with the Seller that the Builder retains all rights with respect
to the Specifications, plans, working drawings, technical descriptions,
calculations, test results and other data, information and documents concerning
the design and construction of the Vessel and the Buyer undertakes therefore
not
to disclose the same or divulge any information contained therein to any third
parties, without the prior written consent of the Builder, excepting where
it is
necessary for usual operation, repair and maintenance of the
Vessel.
40
ARTICLE
XVIII-
INTERPRETATION
In
the
event of a conflict or inconsistency between the terms of this Contract and
any
of the terms of the Specifications attached hereto, the Specifications shall
prevail in all technical respects and the Contract shall prevail in all other
respects. Should there be any inconsistency or contradiction between the Plans
and the Specifications, the Specifications shall govern.
This
Contract shall be construed, take effect and be enforceable in accordance with
and under the laws and regulations prevailing in Japan.
41
ARTICLE XIX
- NOTICE
All
notices and communications in connection with this Contract, except as otherwise
specifically provided, shall be addressed as follows:
To
the
Buyer:
Facsimile:
To
the
Seller: ******
******
******
******
Facsimile: ******
To
the
Builder: ******
******
******
******
Facsimile: ******
42
ARTICLE XX
- EFFECTIVE DATE
This
Contract shall become effective upon execution thereof by the Buyer and the
Seller.
43
IN
WITNESS WHEREOF, the parties hereto have caused this Contract to be duly
executed.
For
the
Buyer: For
the Seller:
By: By:
Title: Title:
44
